Will Optimism head lower as bearish bias persists?

Posted: September 2, 2023

Disclaimer: The knowledge offered doesn’t represent monetary, funding, buying and selling, or different kinds of recommendation and is solely the author’s opinion.

• OP misplaced maintain of $1.4 as sellers overwhelmed the market. 
• Community Progress declined because the altcoin traction eased. 

Optimism [OP] sellers appeared prepared to increase the August positive factors into September. After blocking OP from going above $1.59 within the second half of August, sellers pushed it even decrease in early September. As of press time, the Layer-2 asset was down over 15% from current highs close to $1.59. 

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The altcoin traded at $1.33 on the time of writing and will head decrease if Bitcoin [BTC] cedes under its range-low close to $25.7k. 

Will bulls reverse current losses?

Supply: OP/USDT on TradingView

Based mostly on the technical chart indicators, bulls had been removed from having market leverage within the quick time period. Notably, at publication, the Relative Energy Index (RSI) tried to retreat from the oversold zone on the H4 chart. 

It exhibits delicate shopping for strain on the decrease timeframe, however a weak BTC and the fast overhead hurdle at $1.379 might derail a strong restoration. 

So BTC doesn’t get better lately misplaced floor, sellers might drive OP decrease to the 12-hour (H12) bullish order block of $1.19 – $1.27 (white) or the each day bullish OB of $1.09 – $1.14 (cyan). Any additional drop under these assist zones might see bulls try and defend the $1.0 psychological stage. 

Conversely, OP might goal at $1.5 if bulls reclaim the $1.38 resistance as assist, particularly if BTC surges to $27k. 

Community traction tanked

Supply: Santiment

How a lot are 1,10,100 OPs worth today? 

Based on Santiment, a crypto intelligence knowledge platform, the bearish grip was prevalent. Notably, the Community Progress (blue) declined considerably, indicating the variety of new addresses dropped and general community traction slowed. 

Moreover, the current worth drop was marked by elevated promote quantity (crimson) alongside 90-day Imply Coin Age drop-offs. Collectively, these on-chain metric readings cement the short-term bearish strain.