Will Optimism finally cross the $1.6 roadblock?
Optimism could take a cue from BTC's narrow price consolidation and extend its range trading.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- OP has consistently faltered at the roadblock below $1.65.
- The funding rates turned negative into the weekend (29/30 July).
Optimism’s [OP] uptrend in mid-July has faced one crucial obstacle – climbing above $1.65. Notably, three consecutive attempts to cross the $1.65 mark have been thwarted, setting the native Layer-2 altcoin to chalk up a range formation between $1.38 and $1.65.
Read Optimism’s [OP] Price Prediction 2023-24
Meanwhile, Bitcoin [BTC] faced another price rejection at the range-low of $29.5k. That makes the level a crucial resistance to overcome if bulls are to advance further. But the derailment could further undermine OP from fronting an upswing.
Will the price consolidation persist?
At the time of writing, price action hit the 50 EMA (Exponential Moving Average) of $1.498. In addition, the RSI (Relative Strength Index) inched closer to the neutral 50-mark. Besides, the CMF (Chaikin Money Flow) was yet to cross over the zero mark decisively. It shows muted buying pressure and capital inflows.
Taken together, OP bulls could face a tough call unless both price chart indicators cross their respective median thresholds. With a weak BTC, OP could falter at 50 EMA or D1 bearish order block (OB) of $1.59 – $1.66 (red).
So a likely drop towards the immediate support of $1.4 couldn’t be overruled. If BTC’s narrow price consolidation of $29.0k – $29.5k persists, OP could take a cue and extend its price range of $1.4 – $1.65.
Funding rates turned negative into the weekend
Optimism’s funding rate turned negative over the weekend, which could allow sellers to gain ground if the trend persists. The above negative chart of the OI-weighted funding rate shows that even open interest (OI) rates declined over the weekend.
How much are 1,10,100 OPs worth today?
It reinforces a bearish bias and a dip in demand for OP in the futures market.
The sentiment could only change if BTC decisively reclaims and surges above the range-low of $29.5k. Hence, tracking BTC movement is necessary.
