Optimism hits a key obstacle – Bulls can re-enter here

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

• Optimism faced double obstacles at $.14 and $1.5. 
• Open Interest rates eased slightly, but funding rates were positive. 

Optimism [OP] recorded two legs of recovery since 19 October. At press time, the Layer-2 token was on the verge of fronting the third phase of the recovery but faced two roadblocks at $1.4 and $1.5. 

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

A previous price report on OP established that the bullish defense of $1.165 could tip bulls more gains. The idea was validated during the first phase of recovery. OP extended the recovery during the second leg only to hit two sticky hurdles. 

Bulls can consider these levels

Source: OP/USDT on TradingView

The first recovery phase cooled off briefly at $1.250 before the second leg picked momentum to $1.4. The breaker block on the daily chart of $1.40 – $1.46 (red) was hit at press time. 

Previously, the above hurdle at $1.4 led to a retracement to the liquidity area on the chart (orange) and previous support of $1.349. But bulls were determined to crack it. Should they succeed, the next hurdle will be $1.5; hence, price action faced double obstacles. 

A move beyond $1.5 would push OP to hit $1.590, while a price rejection at the overhead hurdles would drag it to $1.35. 

Such moves could provide two possible set-ups for bulls. One with an entry at $1.35 targeting the overhead hurdle of $1.4 or the re-entry at $1.50 after a confirmed extra upside at the level. For the latter, the take-profit will be $1.590. Each set-up could provide 5% and 6% gains. 

Each set-up’s exit will be below $1.35 and $1.50, respectively. However, the positive RSI and CMF underscored improved buying pressure and capital inflows.

Funding rates remained positive

Source: Coinalyze

Apart from positive buying pressure and capital inflows, OP’s market sentiment was positive, too. The green funding rates confirmed the above stance and demonstrated that players were optimistic about OP. 

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

But it’s worth noting that Open Interest (OI) rates eased slightly at press time. It dripped from $75 million to below $70 million and indicated a slight drop in demand in the past few hours before press time. 

The conflicting signals emphasized the overhead hurdles and the challenges it could expose to OP’s price action. Tracking BTC movement is crucial for optimized set-up.