Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- OP’s rebound has rocked a major bearish OB.
- The average coin age increased, but development activity decreased.
Optimism [OP] trended lower after reaching a recent high of $1.5 in the second half of June. But it reversed the short-term downtrend after reaching $1.2, triggering a recovery that has hit a roadblock and major bearish order block (OB) on the H4 chart.
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Despite the short-term price drop, Optimism has made impressive progress in Layer 2 race, faster than Arbitrum [ARB] about the most important statistics in June.
OP hit a major hurdle
Source: OP/USDT on TradingView
OP’s recovery from the end of June hit a major hurdle and a bearish order block (OB) of $1,374 – $1,457 (red) formed on June 23 on the 4-hour chart. The hurdle prevented OP’s upside attempts, by setting the token to price rejections when the price hits the hurdle.
At the time of writing, the price action hit the hurdle and eased slightly. If the hurdle continues for the next few hours/days, OP could see a return to immediate short-term support levels of $1.27 and $1.20. Of BTC Remaining bullish above $30k, a rebound at $1.27 could lead OP to retest the bearish OB, offering a reasonable risk-reward ratio.
A retest at $1.20 and a subsequent drop below it will invalidate the bullish position. The next target will be $1.1 in such a downswing scenario.
Meanwhile, the RSI declined but veered off the neutral level, indicating that buying pressure has eased but the bulls were still in control. The OBV (On Balance Volume) rose to almost $500 million, underlining the strong demand over the past few days.
Average coin age increased; Development activity stalled
Source: Sentiment
The average coin age of 90 days rose steadily from the beginning of June, underlining a network-wide accumulation of OP tokens over the same period. The lack of sharp declines on the metric shows that the accumulated tokens have remained unmoved for a while – a bullish signal.
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But sentiment was in the negative zone, with development activity falling below its previous low. These stats may frighten investors about OP’s potential near-term prospects.
Bbut a bullish BTC could allay these fears; therefore it is worth following the price action of the king coin before making any moves.