In the current month, the digital asset Optimism [OP] has been engaged in trading activities following an upward triangle pattern on the 4-hour chart, noting a 2.31% increase in its value over the last 24 hours based on data from CoinMarketCap.
The trading volume of OP has surged by 21.38%, indicating signs of potential recovery. Can OP break through the significant $1.18 resistance level and move beyond the ascending triangle structure?
Technical Analysis of Optimism
At the time of writing, the price of OP was positioned along an upward trendline, trading at $1.13.
The upward trend within the ascending triangle pattern suggests a bullish breakout above the key resistance level of $1.19. The support range within the ascending pattern lies between $0.91 and $1.10.
A breakout supported by significant trading volume could confirm the bullish momentum.
As per an observation presented by Ali Martinez on X (previously known as Twitter), a breakout from the ascending triangle could drive the price towards the $1.28-$1.31 range, showcasing a potential 24% increase.
Insights from On-chain Metrics
An examination of the holder’s profitability reveals that the majority (89%) are currently facing losses, with only 7% in a profitable position, as per data from IntoTheBlock. Notably, large-scale investors or whales hold 83% of the total Optimism tokens.
As of the latest data, the Exchange Netflow displayed a value of -$1.7 million, indicating a recent outflow of OP from exchanges. This pattern may signify accumulation by whales or short-squeezing actions aimed at reducing losses.
With a correlation coefficient of 0.93 with Bitcoin, the price movement of OP closely mirrors that of BTC.
Is Optimism Regaining Strength?
As per the latest data from Cryptowaves, the 24-hour Relative Strength Index (RSI) of Optimism stood at 36, rising to 49 within a 4-hour window.
According to insights from Coinanlyze, OP’s Long-Short Ratio registered at 2.84, reflecting a bullish sentiment and potential recovery in the near term.
An increase of 0.26% in Open Interest signals a renewed bullish stance, evident within the ascending triangle pattern formation of OP.
In order to confirm its bullish phase, Optimism must successfully surpass and maintain a position above the $1.18 key resistance level post a breakout from the ascending triangle pattern accompanied by substantial trading volume.
However, failure to breach this level might prompt a retest of the support at $1.13, potentially leading towards the critical support level at $0.90.
Traders are advised to closely monitor the movements of OP within this pattern and keep an eye on whale activities.