Analysis
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?
Source: OP/USDT on TradingView
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
Source: Coinglass
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.
