The Potential for OP as Prices Could Drop to $1.58 Before a Potential Recovery
After reaching $2.7 around a month ago, Optimism (OP) has been on a consistent downward trend. As of the current moment, Optimism is trading at $1.67.
This reflects an 8.67% decline when examining daily charts. Furthermore, on a weekly and monthly basis, there have been drops of 4.29% and 5.28% respectively.
This ongoing decline has led to mixed feelings of doubt and hope among traders. This has prompted speculation on whether a recovery is on the horizon or if the downward trend will persist.
Analyzing OP’s Market Performance
Emerging data indicates that Optimism is currently under significant selling pressure and directional control by the bears.
Recent market indicators point to the presence of downward momentum, notably clear in the bearish signals seen on the Stoch RSI and RVGI.
An evident bearish crossover on the Stoch suggests a strengthening downward trend combined with a weakening upward movement.
Furthermore, another bearish crossover has been noted on the Relative Vigor Index (RVGI), indicating more losses than gains for the altcoin.
Delving deeper, there has been a sharp decline in the number of active addresses related to Optimism.
This drop signifies a reduction in user activity within the network, reflecting a negative market sentiment due to decreasing new users and adoption rates.
Moreover, the altcoin’s Adjusted Price DAA Divergence has recently turned negative, signaling low network utilization and adoption levels.
Lastly, there has been a spike in Total Netflows over the past few days, transitioning into a positive territory. This shift implies an increasing number of traders transferring their assets to exchanges, potentially leading to more selling pressure and subsequent price declines.
Is a Recovery on the Horizon for Optimism?
Although Optimism is currently facing significant downward pressure, some analysts foresee a possible recovery in the future.
For instance, Ali Martinez has suggested a potential price rebound to $3.50, which could indicate a bottom point for OP.
However, in the short term, Optimism is still confronted with substantial selling pressure and a prevailing bearish sentiment.
Considering the existing market conditions, there is a possibility that OP might drop to $1.58. Alternatively, if a rebound materializes, the altcoin will aim to reclaim the $1.83 price level.