Optimism (OP) Market Rebound Stalls as Analysts Predict an 18% Price Dip

Optimism (OP) has experienced a market rebound in the past week gaining by 35.76% based on data from CoinMarketCap. The Ethereum layer-2 token hovers above $2.20 with investors strongly bullish on future price gains. However, certain trading indicators signal otherwise.

Optimism (OP) token has seen a massive uptrend in the past week, surging by 35.76% to trade above the $2.20 mark. This bullish momentum is largely driven by investors betting on further gains in the altcoin market. However, some trading indicators suggest that OP might be up for a trend correction.

According to data from a November 23 post on X, a crypto analysis platform, Optimism despite its current uptrend might be set for a price decline of up to 18%. This analysis is based on a sell signal recently flashed by the TD Sequential indicator on OP’s 4-hour trading chart.

In technical analysis, the Tom Demark (TD) Sequential indicator is used to identify potential price continuations or exhaustion by analyzing patterns within price bars. After OP’s rally in the past week, the TD Sequential indicator now points to a possible trend exhaustion, suggesting a potential price reversal.

With this signal development, the analysis predicts that OP could slide to $2.0. However, further correction could force the token’s price to around $1.80, indicating a potential 18% decline from the current market price.

This price projection is further supported by OP’s Relative Strength Index (RSI), an indicator that measures the speed and magnitude of an asset’s price movement to determine if it is overbought or oversold.

According to the RSI indicator on OP’s 4-hour trading chart, the token’s RSI is valued at 65.18 and descending from the overbought zone. This suggests that buying pressure is weakening and a potential price correction is imminent.

However, it is worth noting that Optimism still trades above its 100-day simple moving average (SMA), suggesting a possible continuation of the uptrend. This factor, combined with the present strong bullish sentiments in the altcoin market, suggests OP may maintain its current price rally, reaching as high as $2.5 where its next significant market resistance lies.

At press time, Optimism is trading at $2.29 following a 1.64% gain in the past 24 hours. The altcoin’s daily trading volume is down by 13.17% and valued at $860.51 million.

On larger time frames, OP is up by 35.76% in seven days and 33.77% in the past 30 days. Despite recent gains, the Ethereum layer-2 token is still down by 54.65% from its all-time high of $4.85.

OP remains a favorite among investors, considering its status in the Ethereum ecosystem. According to data from Top 7 ICO, Optimism is the Ethereum layer-2 network with the third-largest total value locked (TVL), valued at $6.46 billion, falling behind Base ($7.02 billion) and Arbitrum ($14.3 billion).