Optimism is a Layer-2 solution built on top of the Ethereum blockchain. It was launched last year on May 31, 2022. The coin made its all-time high of $3.22 on Feb 24, 2023. The current technical analysis and chart setup shows that it might cross its ATH very soon.
Current Market Status for Optimism
As of 05:30 AM UTC on April 16, 2022, Optimism is trading around $2.7 which is around 16% away from its all-time high of $3.22 which occurred on Feb 24, 2023. Since then it had a roller-coaster ride to the current price of $2.7.
A Look At Past Price Actions
After reaching its all-time high on Feb 24, 2023, the cryptocurrency came under massive price correction which was caused by profit booking.
On Feb 24, 2023, Coinbase announced that it was launching its own blockchain “Base” based on the Optimism blockchain. This caused Optimism to rally to a new all-time high of $3.22(the previous all-time high was $3.1). Since it has been touched twice and failed to break, the price range of $3,10-$3.2 can be considered as resistance.
After reaching $3.22, Optimism’s price slid down to $1.8, post which again recovered to $2.9. It failed to hold that level and again fell back to $2.3.
From March 24 to April 12, the price floated in the range of $2.1-$2.3. However, Optimism gained momentum in its price after Synthetix allocated 200k Optimism tokens every week to top traders. Further, Optimism has the sixth highest TVL locked at $949 million.
Price Analysis
Based on the above price trends and technical indicators we have identified a few trading opportunities for Optimism. We have also used on-chain metrics to check for fundamental factors that can help make good returns on your investment.
Technical Analysis
Note: We have not used daily charts because there is not enough data available for the daily charts. Instead, we have relied on 4-hour charts.
As per technical charts, the Optimism price is expected to stay low for the coming couple of weeks.
Technical indicators show that:
- RSI has cooled from overbought regions and is now at 63.
- MACD is about to show a negative crossover. The next positive crossover is expected in a coming couple of weeks.
- Volumes are now more on the selling side.
- There is a resistance in the zone of $2.6-$2.9. After that, a move above $2.9 will take the cryptocurrency toward $3.2.
Therefore, traders should only buy after $2.9 for a target of $3.2. After, $3.2 partial profits can be booked and traders should exit the trade.
Target: $3.2
Stop loss: $2.5
Fundamental Analysis
Being one of the prominent layer-2 solutions of Ethereum, Optimism will definitely profit from the recent Shapella (Shanghai) upgrades which aim to make Ethereum, faster and cheaper to transact. However, it is a long way before Ethereum reaches the speed and costs of its L2 solutions.
The total TVL locked in Optimism is close to $1 billion as of April 16, 2023, as per DeFi Llama. This is the sixth-highest TVL of all protocols.
On-Chain Analysis
Daily Active Addresses have been increasing since March 13, 2023. They are very close to their YTD high which was around the period of 1-15 March.
Total Unique Addresses are constantly increasing and are now at 3.3 million. The increase in addresses over the last 24 hours is 21k.
Optimism suffered a setback after Jan 12, 2023, when its transactions fell to one-fourth. The blockchain explorer shows 800k unique transactions on Jan 12 which fell down to less than 200k transactions on Jan 19. This fall was caused due to an end in NFT incentives of its “learn to earn” program.
However, recently, its transactions are again rising and have again touched a high of 475k per day on April 9.
Social Analysis
Optimism’s Twitter profile has been constantly gaining followers since February 2023. Currently, it has 0.46 million followers on its Twitter profile.
Conclusion
Optimism prices are moving towards a new ATH in the upcoming month. This price movement is strongly backed by fundamental as well as on-chain factors such as increasing TVL, increasing users, etc. Traders however should buy it above $2.9 so that they do not burn their funds in a false move.
Disclaimer: Voice Of Crypto aims to deliver accurate and up-to-date information but will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.
