While altcoin giants like XRP, ADA, DOT, and MATIC are bearish, Optimism (OP) investors are enjoying 3.5% gains. Technical analysis suggests that the momentum may continue for a while.
Altcoin bulls take over OP chart again
Ranked #40 by market cap, Optimism (OP) is currently trading at $1.56, gaining 3.5% on the day. The altcoin has failed to break past the long-term resistance line this week. However, technical analysis shows that the bulls are more powerful for a breakout.
Technically, the OP price is falling as the ATH price hits $3.3 in late February. Meanwhile, he used the descending resistance line as resistance. This line has rejected the price several times, most recently on August 8th. This failure led to a sharp drop in the altcoin price. At one point, the OP is down over 30% to the horizontal support of around $1.2.
The correction in question is clearly seen by the long lower wick of the weekly candle from August 14 to August 21. The weekly RSI, on the other hand, has formed a bullish structure by breaking above the resistance line even though it is below 50. This shows that altcoin bulls are trying to make a comeback. Moreover, such breakthroughs in the RSI often lead to similar breakouts in price movements. Therefore, there is a possibility that the OP price may rise above the resistance line and rise to the next resistance level at $2.
Pay attention to this level
According to the daily chart, OP price is trading in an ascending parallel channel after hitting a year low of $0.9. This move is a bearish pattern that in most cases leads to collapses. However, there are 2 positive signals for the altcoin on the chart:
- OP price created a false spread below the channel (green ellipse). Signals like this often lead to strong price spikes.
- The daily RSI has retraced the 50 level and is trending upwards. Both point to an uptrend.
However, OP price is still trading below the middle line of the channel at $1.64. The price of OP needs to break above this level for the uptrend to be confirmed. If so, the next level of resistance will be the $1.88 resistance line of the channel.
Coming to the critical level, the OP price must rise above $1.64 to confirm the bulls’ return. Otherwise, this time the bears will step in. In the first place, they will try to reduce the altcoin price to $ 1.4. Technical analyst David predicts that a small rally will be enough for the OP, which is currently trading at $1.56.
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