Over the last five months, the digital asset known as Optimism (OP) has been moving within a range, facing consistent hurdles in surpassing the $2 mark.
Despite this period of consolidation, renowned crypto expert Ali has pointed out the formation of an ascending triangle pattern, historically considered a bullish signal.
This pattern might set the stage for a surge towards the anticipated Fibonacci target.
Possibility of significant gains?
In previous instances, Optimism has displayed similar price actions where breakouts led to substantial increases. The first breakout witnessed a surge from approximately $1.00 to highs near $3.23, resulting in a 220% profit.
A subsequent breakout occurred around $1.06, propelling the price to $4.77, signifying a 350% upswing.
Currently, market analysts are eyeing a potential third breakout level near $1.85. If history repeats itself, Optimism could climb to $7.20, aligning with the 1.618 Fibonacci retracement level.
This move would represent a 340% jump from the breakout level, in line with past performances.
Present market dynamics and price action
At the latest update, Optimism was trading at $1.81, indicating an 11.09% increase in the last 24 hours and a 31.03% surge over the past week.
The 24-hour trading volume stood at $1 billion, and the market capitalization hovered around $2.27 billion, with 1.3 billion OP tokens in circulation.
Currently, the price of Optimism is inching closer to the $1.85 resistance level. Breaching this barrier could confirm the ascending triangle breakout, potentially leading to a sustained bullish trend.
Previous patterns in 2022 and 2023 suggest that Optimism has experienced similar setups before, catalyzing rapid price spikes.
Positive on-chain data sentiment
On-chain statistics suggest growing interest in Optimism. A recent uptick in new addresses demonstrated a 39.43% rise over the last week, while active addresses increased by 12.93%.
Moreover, addresses with zero balances surged by 83.30%, indicating a re-engagement of previously dormant wallets with the network. These metrics hint at heightened user engagement and adoption.
Exchange netflows also depicted an optimistic scenario, as per Coinglass figures.
Records showed that on the 12th of November, there was a net outflow of $2.13 million from OP, suggesting a movement of tokens off exchanges, potentially for long-term holding.
Such outflows historically correlated with price upticks, implying reduced selling pressure.
Consistent trading activity driving growth
Transaction volume data corroborated the bullish outlook. The seven-day average transaction volume for Optimism stood at 288.89 million OP, peaking at 346.1 million on November 10.
The lowest volume recorded was 238.67 million OP on November 5.
This stable trading activity indicated continuous liquidity and network usage, laying a solid groundwork for potential price appreciation.