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.

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

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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 commence

The 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 outlook

The 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.

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Realistic or not, here’s OP’s market cap in BTC’s terms

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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.