Optimism (OP) is picking up again Analysis of July 20, 2023

After testing $3, Optimism entered a bearish phase to reach a new low point slightly below $0.90 in early June.

Situation of the PO

Since this last low, the price of the OP has performed more than 85%. Optimism now holds above the former support-turned-resistance level at $1.5. These latest moves have demonstrated an increase in trader participation, which can be confirmed by the growth in cryptocurrency open interest.

The last monthly close is promising after having formed a nice hammer. The same can be said when looking at the last weekly candle, which formed a bullish engulfing. From a chartist point of view, we can easily observe the formation of a double bottom on a daily basis. This figure is intended to be conducive to a trend reversal. Regarding the main indicators, the price of the OP is above the moving average 50, but below the moving average 200 daily crossed downwards. On the oscillator side, the RSI and MACD show high momentum. This is intended to be reassuring for a potential continuation of an upward trend, but does not exclude the risk of a short-term correction. Finally, the strong volumes observed in mid-July on the OP may constitute an interesting factor. Indeed, the latter can show the non-negligible demand for the cryptocurrency at this moment, which gives substance to the current uptrend.

Assumptions for the Optimism Course

For a bullish scenario, it would be necessary to consider going beyond the $1.8 zone before imagining reaching the psychological threshold of $2 again. If this resistance is broken upwards then, we could have an even more bullish horizon, starting with $2.5.

For a bearish scenario, we would have to consider a return below the $1.4 zone to imagine finding $1.2. If this support does not hold, we can consider a bearish continuation until the next support of $1.

Conclusion

Many are the technical factors promising nice moves to come on the course of Optimism. However, bullish scenario reversals are not far off. Thus, it will be important to carefully observe the reaction of the price on the different identifiable levels to confirm or not the different hypotheses made. Beware of potential “fake outs” and “market squeezes” in each situation. In addition, it should be remembered that these scenarios are based solely on technical analysis. The price of cryptocurrencies can change more or less quickly, depending on other more fundamental factors.