Optimism: Bulls can extend rally, but only on this condition

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

• Optimism maintained its uptrend despite a pullback at key price level.
• Market sentiment stayed bullish on the positive funding rate. 

Optimism’s [OP] bullish rally faltered at a key price level with the general crypto market continuing to flash mixed signals. Earlier, Optimism embarked on a remarkable 72% rally from its June low of $1 to reach the $1.8 price level.

Read Optimism’s [OP] Price Prediction 2023-24

Despite the price rejection for Optimism, total crypto market volume grew by 43% over the past 24 hours, per CoinMarketCap. This could provide an added boost for OP bulls to break past this price hurdle.

Bullish rally aims to hit $2 psychological price level

Source: OP/USDT on Trading View

A look at Optimism’s uptrend on the four-hour timeframe showed the altcoin making a series of higher lows as prices surged. July brought further gains as buyers cleared the $1.4 resistance level.

Optimism’s uptrend was accompanied by a surge in trading volume, as evidenced by the OBV (On Balance Volume). Similarly, the RSI (Relative Strength Index) remained above neutral 50 despite a sharp decline occasioned by the recent price dip.

Both indicators hinted that significant buying power was still available for bulls.

Zooming out to the higher timeframe (12H) showed a bearish order block at the $1.8 price level. Bulls will need to clear this hurdle to reach the short-term goal of $2. This could be supported by Bitcoin [BTC] breaking out of its narrow price range ($28.8K – $29.3k).

A failure to clear this level at the first attempt would see bulls find support at the $1.4 to $1.5 price level. If bears break below this near-term support, this could flip Optimism bearish on the lower timeframes.

Bullish conviction remains strong in futures market

Source: Coinalyze

How much are 1,10,100 OPs worth today?

Optimism’s Open Interest maintained its uptrend on the one-hour timeframe, despite the price pullback. This highlighted the prevalent bullish sentiment. Per Coinalyze, the OI registered a positive 10.6% change over the past 24 hours to show continued bullish backing.

Likewise, the Funding Rate was positive. Together, it signaled that the press time pullback was just a temporary setback and Optimism could see more gains in the near term.