Once again, a few cryptocurrencies are sending market waves. Despite remaining largely bearish this year, most tokens are turning up, showing what a bull run will look like. Probably, we are in a bull market. But, with macro shivers continuing to wreak havoc, we would be cautious about making a bull call now.

c is one such token that has surprised the market. Some may have written off the cryptocurrency after it slipped below a crucial $1 price. With a 65% increase in value in the last week, OP is easily one of the top-gaining cryptocurrencies. Improved sentiment has been boosting the token. However, the fact that OP has more gains underlines its strong fundamentals lately.

As CoinJournal reported, several developments have been boosting the Optimism token. One among them is the “OP Stack” launched earlier this month. Without getting into the details, Optimism has been selling itself as an efficient and low-cost blockchain of choice.

We also know that Ethereum has been robust in the past week. As a result, the positive sentiment could be flowing to its L2 scaling solution Optimism. In fact, Optimism considers itself an extension of the Ethereum software. Quoting, “If it works on Ethereum, it works on Optimism at a fraction of the cost” – Optimism team.

OP recaptures $1 resistance in a bullish market

Source – TradingView

The daily chart shows OP correcting after breaking past the $1 resistance level. The breakout suggests that OP has started a bullish momentum that could last for a while. 

The cryptocurrency is surging above the 20-day and 50-day MA. The MACD indicator has shifted above the midpoint and indicates a building momentum.

Should you buy OP now?

OP is a buy after the bullish breakout at the resistance. However, investors should wait for the price to settle at or around $1. A buy trade will be confirmed by a bullish signal at the mentioned level. The next target for the cryptocurrency is around $1.474 or $1.8, depending on the prevailing sentiment.

Where to buy OP

Optimism (OP/USD) may be gearing up for a recovery going by the current technical outlook. The token of the Ethereum Layer-1 scaling solution has reclaimed $1. The price is a more than 50% recovery from the lows of $0.66 less than a week ago. Fundamentals are improving too.

Data by DeFiLlama shows that the Total Value Locked on Optimism has been stabilising. Remember that Optimism’s TVL topped $1 billion at the height of a bullish surge in August. It then crashed to $864 million and further down to $810 million. The cryptocurrency’s TVL is currently $940.72 million, commensurate with the price recovery.

There have been positive developments too. Optimism announced the “OP Stack” on October 18. The code consists of modular elements that can be harnessed for custom chains. The OP Stack powers the next-gen Optimism architecture. 

Slight but important news for OP as well. On October 10, the team updated that when it launched the OP token, it set its total supply inflation at 2% per year. However, the team mistakenly put the inflation rate at 20%, something they updated back to 2%.

Consequently, there has been a sustained adoption of OP in the last one month. On October 24, Optimism said that it was handling 150,000 transactions on average every day in the last 30 days. That was an increase of 40% from the previous 90 days. 

OP token reaches the $1.0 resistance – Set to blow it away?

Source – TradingView

The momentum indicator shows a building bullishness for the Optimism token. After remaining subdued below the moving averages, OP has recovered above them again. The cryptocurrency is trading at a key resistance of $1.00. 

What next for OP?

A bull scenario will be confirmed if OP successfully clears above $1.00. With a strong and building momentum, a breakout is a more likely scenario. If the projection comes to fruition, bulls will try to take OP to $1.48.

In the alternative scenario, bulls will be rejected at $1.0. That could welcome a correction below the resistance. The bulls could look to try a breakout another time.

Where to buy OP

• Optimism is a Layer-2 scaling solution on Ethereum

• Optimism price is falling amid a decline in ETH following the much-anticipated Merge

• OP, the native token, has lost support and faces further bearish pressure

Ethereum Layer-2 scaling solution Optimism OP/USD shows fewer signs of renewal. A week after the expected Ethereum Merge, Optimism crashed by around 15%. That happens amid fading hype around post-Merge gains in Ethereum-related tokens.

Do not, however, get it twisted. Ethereum’s shift from Proof-of-Work to Proof-of-Stake introduces great benefits. These impacts will be realized in the longer term, and linked platforms such as Optimism will benefit. Meanwhile, investors may have to put up with a bearish market for Optimism after the token lost key support. The bearish market also reflects concerns about tighter economies as Central Banks hike rates to tame inflation.

Optimism prediction as token loses grip of $1.0

Optimism token trades at $0.922, slipping below $1, a support zone. The price level means Optimism has more than halved since its August high of $2.2. That also suggests a bubble burst since it witnessed a strong surge in July on the back of strong fundamentals.

Source – TradingView

A technical outlook shows that Optimism has fallen below the 20-day and 50-day moving averages. The decline below the $1 support opens chances for further declines. 

A look at the RSI shows a reading of 38. The reading indicates increased selling pressure. The token has more room to decline before we get to the oversold territory. Optimism will potentially continue to decline to find support at $0.74.

Summary

There is a lack of upside momentum for the Optimism token. The token lost important support at $1. It means that we should look for lower prices. The next support is $0.74 due to the weak sentiment.

• Optimism token has, alongside L2 Ethereum solutions been surging ahead of the Merge.

• Optimism witnessed strong fundamentals in July and August.

• OP could fall by a further 22%.

Optimism OP/USD is a Layer-2 scaling for the Ethereum network. Its role is to facilitate less costly and quick transactions on Ethereum. Following the Ethereum Merge, eyes were on alternatives and scaling layers for price reaction. Since the Merge has occurred, it is crucial to evaluate how Optimism has reacted. 

Well, Optimism was the talk of the streets in July and early August as prices pumped. Whereas the gains were driven largely by speculations, a couple of fundamentals helped. One includes the liquidity mining program which Optimism launched on Aave in early August. The development pushed the deposits on Aave to Optimism up by a significant 493%. 

The Ethereum Merge was also adding momentum to Optimism. The Merge is expected to increase the role of scaling solutions through a “Rollup-Centric Roadmap.” The roadmap allows Ethereum to become the data availability and settlement layer. It will leave the scaling role to Layer-2 Protocols.

OP risks another 22% drop as price falls post-Merge

Technicals are not convincing for the Optimism token. On the daily chart, the price drop coincides with a MACD crossover to the bear zone. That allowed the price to fall below the moving averages. 

Source – TradingView

Assuming an extended correction, OP will fall back to the late August lows of $0.98. That represents a drop of around 22%. The bearish prediction will be invalidated if the price recovers above the 20-MA. It should be confirmed with a clear reversal and improved sentiment.

Concluding thoughts

Optimism could continue to fall despite the expected benefit from the Merge. It suggests that the token already benefited from the post-Merge expectations. $0.98 is the next bottom for OP.