Altcoin
OP closes below $3.5 – Is sell season finally at its end?
Despite being a beneficiary of last week’s upgrade, OP got off to a rocky start on the charts.
- OP’s price dropped from $4.83 to $3.42 over the last seven days
- While Optimism’s revenue has risen, the token might continue to decline
Optimism [OP], the native token of the Ethereum Layer 2 (L2) project, was one of the biggest losers of the entire crypto-market last week. In fact, according to CoinMarketCap, OP’s price dropped by a staggering 26.29% while trading at $3.42 at press time.
Surprisingly, this happened the same week Ethereum’s Dencun upgrade took place. The Dencun upgrade was great news for L2 users as AMBCrypto confirmed that gas fees were lower on the networks. As a result, transactions on Optimism jumped. Based on data from Artemis
, the crypto-analytics platform, daily active addresses on the network hit 114,200 on 15 March.
Source: Artemis
Health is not wealth all the time
An increasing trend in active addresses indicates growing interest in OP’s usage. It also reflects a healthy ecosystem as transactions also jumped. However, the change in active addresses did not signal a shift in investor sentiment, with the price soon depreciating on the charts.
This was not the first time, however. In the past as well, OP’s price and active addresses have diverged. During the bear market, AMBCrypto reported
how this happened on several occasions.According to Token Terminal, despite the high user activity, Optimism’s revenue fell by 60.7% in the last seven days. A fall in revenue is a sign that fees generated quickly went down as soon as they went up after the Dencun upgrade.
At press time, that trend seemed to have changed as AMBCrypto observed the revenue climbing by 222% in the last 24 hours. If revenue continues to increase, then demand for OP might jump. Should this be the case, the price of Optimism’s native token might bounce off its lows.
Source: Token Terminal
Sell season on OP has not ended
Here, it’s worth checking whether OP is likely to recover from last week’s price depreciation. To do this, AMBCrypto analyzed the Price – DAA divergence. DAA stands for Daily Active Addresses.
Now, though the Price – DAA does not paint an overall picture, it distinguishes between a buy and a sell signal. For instance, active addresses on Optimism fell on 27 February. A week later, OP rallied to $4.84.
On the contrary, at press time, the DAA grew more than the price, indicating that a buy signal has not appeared yet. In this instance, OP might record another consistent downtrend. Therefore, it won’t be unexpected if the price drops below $3 soon.
Source: Santiment
How much are 1,10,100 OPs worth today?
If OP’s price continues to fall, then it would be proof that Ethereum’s upgrade was a “sell the news” event for L2s. However, the long-term outlook for OP could be bullish. One reason for this is ETH and its correlation with the L2 tokens. Should ETH’s price spike, OP might do the same.
