Optimism (OP): Buy Signal Indicates 26% Price Rally?

Optimism OP

Optimism (OP) price looks promising as both broader market indicators and investor behavior are signaling a buy signal.

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The question now is whether OP will continue to generate profits as it has since the beginning of the year, or if its upward momentum will be halted.


Optimism (OP) Price Rebounds: Buy Signal Detected

While the beginning of the month presented challenges for Optimism’s price, the altcoin has recently regained strength. This resurgence can be attributed to increased participation from OP holders, leading to a notable surge in active addresses. In the past 24 hours alone, active addresses have grown by over 30%.

Optimism Active Addresses. Source: IntoTheBlock

The heightened activity of investors on the network, coupled with the price decline, has triggered a buy signal for Optimism. This is evident from the Price-Daily Active Addresses (DAA) Divergence metric, which measures the relationship between a cryptocurrency’s price and the number of daily active addresses. In the case of OP, the divergence indicates that it is currently a favorable asset to accumulate.

Optimism Price DAA Divergence. Source: Santiment

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Price-Daily Active Addresses (DAA) Divergence occurs when a cryptocurrency’s price and the number of daily active addresses exhibit contrasting trends. This disparity suggests potential discrepancies between market valuation and actual network usage or adoption. In the context of Optimism, the combination of declining price and increasing participation signals a buy opportunity, as per the DAA divergence metric.

Optimism (OP) Price Analysis: Potential for 26% Rally

Currently, Optimism’s price sits at $3.72, facing resistance at the $3.99 mark. If OP manages to break through this barrier, it could establish $4.00 as a support level, paving the way for a climb towards $4.69. This upward movement would mark a new year-to-date high and signify a significant 26% rally.

Both the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) indicate potential bullish momentum. RSI measures price momentum, identifying overbought or oversold conditions, while MACD is a trend-following indicator that highlights buy/sell opportunities based on the relationship between two moving averages.

OP/USDT 1-day chart. Source: TradingView

Currently, both indicators are on the verge of a bullish reversal, supporting the anticipated 26% rally in OP’s price. However, failure to breach the $4.00 mark could lead to a decline, with Optimism’s price potentially dropping to $3.42. If this level is breached, it could push the altcoin below $3.00, invalidating the bullish outlook.


Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.

 

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