Optimism surges 38.6% on the back of buying pressure, but…
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Optimism saw heavy buying pressure that saw prices skyrocket.
- The sellers were not yet dominant, although they could force a pullback toward $1.2.
Measured from the low of Monday 19 June, Optimism [OP] posted gains of close to 40% within the following 48 hours. This rally was borne by enthusiastic buyers and the demand has not weakened considerably yet.
How much are 1,10,100 OPs worth today?
Bitcoin [BTC] also has a bullish outlook on the charts, which could positively affect the altcoin markets. There was also the possibility of a pullback for the OP token price if a lower timeframe support level gave way.
Optimism faces rejection from $1.5 – deeper pullback could commenceThe H4 market structure was firmly bullish. On 13 June, Optimism posted a lower high at $1.2. A week later, on 20 June, the bulls breached this level and revealed their intent.
Thereafter, the OBV and trading volume also rocketed higher alongside prices. This showed heavy demand and a firm short-term uptrend. An examination of the daily timeframe chart showed that the $1.48, $1.55 and $1.67 levels are important resistances to monitor.
Optimism has already faced rejection at the $1.48 level, and another attempt to breach it faltered at $1.45. This saw prices descend to the $1.34 short-term support at press time.
Although the RSI neared the neutral 50 level, the OBV did not see a sharp drop yet. Hence, the pullback might not morph into a downtrend, as selling pressure was not yet dominant.
Speculators were shedding their bullish outlookThe price action of OP on the 1-hour chart over the past two days has slowly shifted downward. The rejection at $1.48 forced prices back to $1.345. During this time, Open Interest declined, showing short-term bearish sentiment.
Realistic or not, here’s OP’s market cap in BTC’s terms
The spot CVD also trended downward during the rejection to highlight selling pressure on the lower timeframes. Therefore, while the H4 chart remained bullish, a drop to the $1.345 support or further south could not be ruled out.
In the event of another leg downward, a retest of the $1.2 support zone could offer a buying opportunity.