The optimism has seen bearish action since the beginning of this month. But this week has been much worse for investors and traders. According to Coingeckothe token has fallen more than 12% since last week.
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With a market correction underway, there could be more pain to come for all portfolios with OP. However, there are several reasons why investors and traders should still back Optimism.
Increasing use in the chain due to a growing user base
Price-wise, OP seems like a tough bargain after a month of heavy abuse from the bears. However, data about the chain looks very different.
According to data from Nansen, growth within the chain is booming for Optimism. The platform’s growth as the self-proclaimed “Superchain” on Ethereum is working as active addresses continue to increase along with transactions, indicating chain-wide usage across its various constituent chains.
The platform has also announced several events that may influence this growth in the chain.
Optimism yes host tomorrow, July 31, a chain-by-chain hackathon, contributing to this sudden increase in active addresses on the platform. This should offset any shift in investor confidence as it portrays Optimism positively: a platform worthy of development with the support of a growing community.
🟡⚪️Superhack is a Superchain-wide hackathon. 🔵🔴
Sign up and view bounties from teams like @wereldmunt @baseren @fashionnetwork @Celo and more!
Details via link-in @ETHGlobal‘s biography.
Apply before July 31. https://t.co/EBsgKWk9Z2— Optimism (@Optimism) July 26, 2024
The organization too announced the next Retro Funding round, which will reward projects based on three categories: Ethereum core contributions, OP stack research and development, and OP stack tooling. The reward for the event consists of 8 million OP tokens, which will further help the winning projects increase their impact on the chain.
PUMP THIS SHIT pic.twitter.com/jySc2uxBnI
— ProfessorAstrones (@Astrones2) July 24, 2024
These statistics contribute to stronger bullish sentiment among analysts like X-user Professor Astronesshowing support for OP as he shows that the token has broken the downward trend it has been on since the beginning of this year.
While confidence in the platform and the token is still high, some things need to happen for OP to see green again.
Taurus have to wait for the perfect timing
At the time of writing, OP bulls have a perfect and stable platform for a rocket to the upside, and it should be noted that $1,694 is the long-term support level for this move.
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However, the high correlation with Ethereum leaves much to be desired. Bitcoin and Ethereum move in sync, meaning that if one experiences pain, the other will also fall. OP’s indirect correlation with Bitcoin will have a major impact on how the token moves soon.
With the current market correction, investors and traders should lower their expectations of a breakout in the coming days. However, the strong support at $1,694 gives bulls a stable platform to launch upwards.
Should the bulls lose this position, expect more pain in the coming days or weeks. But if the level is strongly maintained, $2,331 will be the target level for the bulls.
Featured image from Pexels, chart from TradingView