Optimism Crypto Hits 5-Month Low: Is It A Buy Now Opportunity?

Optimism

OP seems to be stabilizing above the critical support of the $2 level, indicating early signs of a strong comeback. If investor confidence supports it, it may result in substantial growth.

The crypto has slumped below the key exponential moving averages of 50 and 200 days. Nonetheless, the dynamic resistance may act as an obstacle ahead and could halt the progress before it hits the $3 mark. 

Optimism Is Building Base For Further Advancement

The possibility of Optimism retaining $3 as support is looking good as investors become more optimistic about making recent investments profitable. This positive outlook is expected to reduce the selling pressure and help the asset recover.

Moreover, the volume profile has witnessed an uptick in the last week following the increased stability near the $2 level. The increased volume profile marks the increasing participation of the buyers in the crypto. Daily, the volume inflow has improved continuously and reached $210.03 Million.

Furthermore, the volume-to-market capitalization ratio has jumped to 8.85%, indicating the increased participation of the traders and Investors at the lower levels. It provides a positive stance on the possible drop in the selling pressure and price recovery.

Factors That Could Challenge Optimism Crypto Rally

Despite the volume growth, the recent selloff has put a lot of pressure on buyers on their way to recovery. The short-term selling pressure has weakened the bull’s confidence after a breakdown below the critical EMAs of 200 days. 

Furthermore, Optimism’s journey towards reclaiming $3 as a support level seems to be backed by the potential for significant profits. However, there are still some obstacles along the way. The EMAs of 50 and 200 days EMAs may act as barriers. Overcoming these will require a more robust bullish momentum.

Also, the social volume and social dominance data have declined in the last two months. The social volume count was 864, with a social dominance of nearly 3.45% in January. However, the social volume has dropped below 300, and the supremacy has fallen by 50%.

The above data suggests that the users’ participation in the crypto. If the project fails to attract more users, it may impact the futuristic growth of the asset.

Optimism Price Prediction

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The stability above the critical support of the $2 level could drive significant growth in the OP crypto. The broader crypto market is looking positive, increasing the recovery potential. However, recovery on the higher side is associated with some hurdles towards a new high. The key EMAs are on top of that. On the higher side, the $3 level may act as a resistance for the crypto. 

If Optimism struggles to surpass this resistance. In that case, investors may take profits, leading to a pullback that could potentially drive the price below the $2 support level and challenge the optimistic outlook.

Conclusion

The Optimism crypto (OP) is stabilizing above the critical support of $2 and showing early signs of a strong comeback. Increased buyer participation and positive investor outlook may help the asset recover. However, the 50 and 200 days EMAs may act as barriers, and the social volume and dominance have declined over the last two months, potentially impacting future growth. 

Furthermore, the broader crypto market looks positive, but the $3 level may act as a resistance for the crypto. If Optimism struggles to surpass this resistance, investors may take profits, leading to a potential price pullback below the $2 support level.

Technical levels:

Disclaimer

The views and opinions stated by the author, or any people named in this article, are for informational purposes only and do not establish financial, investment, or other advice. Investing in or trading crypto or stock comes with a risk of financial loss.

Source: https://www.thecoinrepublic.com/2024/04/20/optimism-crypto-hits-5-month-low-is-it-a-buy-now-opportunity/