Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
- Sellers pushed OP lower, but bulls could defend the range-low of $1.302
- Liquidity existed at $1.302 and $1.357 and could see a strong price reaction
Optimism [OP] was stuck in a narrow price range formation of $1.30 – $1.35 in the first week of September. The range could extend further as Bitcoin [BTC] remained muted in its range-lows of $25.7k as of press time.
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Another price reversal, especially at the range-low of $1.3, was likely amidst massive accumulation by whales who took advantage of the discounted prices.
Will sellers benefit from the range-high again?
Source: OP/USDT on TradingView
In the first week of September, OP oscillated between $1.3 and $1.35. At press time, the 50-EMA (Exponential Moving Average) edged lower to the range-high. It could make the level more challenging for bulls to bypass, especially if BTC’s weakening persists in the short term.
Ergo, another price rejection at the range could be imminent, and a shorting opportunity could occur. A short entry position at $1.34 with a take-profit at the range-low ($1.30) could offer a 2.8% profit if such a rejection at the range-high happens.
However, a candlestick session close above the range-high near $1.35 will invalidate the short set-up. But such a move could falter at $1.36 or the H4 bearish order block (OB) of $1.37 – $1.38 (red).
Meanwhile, the Relative Strength Index (RSI) wavered within the low ranges in the first week of September, underscoring the wavering buying pressure. The Chaikin Money Flow (CMF) also struggled to cross above zero, reinforcing muted capital inflows.
Open Interest rates stagnated
Source: Coinglass
Read Optimism’s [OP] Price Prediction 2023-24
According to Coinglass, Open Interest declined since August but stagnated in the first week of September. This demonstrated that the demand for OP in the derivatives segment declined in August but stagnated in September. It underscores a neutral sentiment.
A look at the Binance liquidation map from Coinglass revealed key OP liquidity levels existed at $1.357 and $1.303. It meant there could be a strong reaction to the upside after collecting the liquidity at $1.303, which aligned with the range-low.
On the other hand, another price reversal could be likely at $1.357, near 50-EMA. So, the two levels could act as a great take-profit and exit levels.
