As Optimism derails at $1.6, what’s next?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Optimism hit a crucial resistance near $1.6.
- Weighted sentiment improved while volume declined.
Optimism [OP] bulls could face a tricky balancing act moving forward, as they hit a crucial $1.6 hurdle. The altcoin has been range-bound between $1.4 and $1.6 since 14 July. But on 19 July, it inflicted a +15% rally, jumping from the range-low to $1.63.
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However, OP faced price rejection at a range-high, doubling as a crucial resistance level that could derail further upside.
In addition, most Fed watchers are inclined towards a likely 0.25% rate hike during next week’s FOMC meeting (25/26 July). So, Optimism could face more difficulty cracking the $1.6 resistance and defending the range lows if a hawkish stance prevails.
Will sellers exploit the obstacle?
The $1.59 level was a key support in mid-January and May. But there has been critical resistance recently, setting OP to consolidate below it in the past five days. Above $1.59 lays another hurdle, a bearish order block (OB) of $1.63 – $1.88 (red) on the daily chart.
As a result, OP could edge lower, especially if BTC fails to cross its mid-range level of $30.5k and the Fed takes a hawkish stance during next week’s meeting. A breach below the range-low of $1.4 will flip the H4 structure bearish.
Bulls can thus consider a range-low of $1.4 for bids. The range lows also align with the H12 bullish order block of $1.4 – $1.5 (cyan) and could make the area a bullish stronghold.
Meanwhile, the RSI (Relative Strength Index) eased to 60; denoting OP bulls still had leverage at the time of writing. Similarly, the OBV (On Balance Volume) registered an uptick, confirming improved demand in the past few hours.
Sentiment improved; volume declined
How much are 1,10,100 OPs worth today?
However, active addresses peaked after OP mounted above June highs on 15 July and dropped significantly afterward. The peak was also marked by massive whale interest, implying that profitable whales probably locked gains at that level.
In addition, sentiment improved significantly as it edged closer to zero. But it has yet to cross the neutral level. So, a likely hawkish stance from Fed and declining active addresses could further complicate the bulls’ efforts to clear the $1.6 hurdle.