Optimism cut short at $1.4 – A price reversal seems …

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

  • OP’s rebound has faltered a key bearish OB.
  • Mean Coin Age rose but development activity eased.

Optimism [OP] trended lower after hitting a recent high of $1.5 in the second half of June. But it reversed the short-term downtrend after hitting $1.2, inflicting a recovery that has hit a roadblock and key bearish order block (OB) on the H4 chart. 

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Despite the short-term price faltering, Optimism has made impressive progress in Layer 2 race, outpacing Arbitrum [ARB] on key metrics in June. 

OP hit a key hurdle

OPUSDT 2023 07 02 13 09 43

Source: OP/USDT on TradingView

OP’s recovery from late June hit a key hurdle and bearish order block (OB) of $1.374 – $1.457 (red), formed on 23 June on the 4-hour chart. The hurdle has prevented upside attempts by OP, setting the token to price rejections whenever the price hits the hurdle. 

At the time of writing, price action hit the obstacle and eased slightly. If the hurdle persists in the next few hours/days, OP could see a retracement to immediate short-term support levels at $1.27 and $1.20. With BTC remaining bullish above $30k, a rebound at $1.27 could set OP to retest the bearish OB, offering a reasonable risk-reward ratio. 

A retest of $1.20 and a subsequent drop below it will invalidate the bullish thesis. The next target will be $1.1 in such a downswing scenario. 

Meanwhile, the RSI eased but pivoted from the neutral level, denoting buying pressure eased but bulls were still in control. The OBV (On Balance Volume) surged close to $500 million – underscoring the strong demand in the past few days. 

Mean Coin Age rose; Development activity faltered

Optimism OP 13.32.13 02 Jul 2023

Source: Santiment

The 90-day Mean Coin Age rose steadily from early June, underscoring a network wide-accumulation of OP tokens in the same period. The lack of sharp drops on the metric shows the accumulated tokens have remained unmoved for a while – a bullish cue. 

How much are 1,10,100 OPs worth today

But sentiment was in the negative zone, with development activity faltering below its previous low. These metrics could spook investors about OP’s potential short-term outlook.

But a bullish BTC could ease these fears; hence it is worth tracking the king coin’s price action before making moves. 

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