Optimism price could shoot up by 30% after OP whales accumulation spree
- Optimism price shows a clear bullish divergence on the daily chart, forecasting a potential 30% run-up to $1.82.
- Massive spikes in Whale Transaction Count combined with accumulation patterns suggest OP holders are expecting a bullish future.
- A daily candlestick close below the $1.34 support level will invalidate the bullish thesis and potentially trigger a correction to $1.06.
Optimism (OP) price shows strength despite the market-wide sell-off on June 5. Additionally, the technicals and on-chain metrics both strongly suggest a bullish future for OP holders.
Also read: Apple staying mum on Metaverse at WWDC wipes out Metaverse tokens’ value by 10%
Optimism price ready to break free
Optimism (OP) price slid 14% on June 5 but soon recovered and produced a daily candlestick close above $1.34. This move that collected the sell-stop liquidity showed an impressive recovery, which is the first sign of willing OP buyers in the market.
Additionally, the Relative Strength Index (RSI) and the Awesome Oscillator (AO) indicators display higher lows, indicating rising bullish momentum for Optimism price. Combining the indicators’ rising momentum with OP, which has produced lower lows, reveals a bullish divergence.
This technical formation is obtained when the underlying asset produces a lower low while the momentum indicators set up higher lows. The non-conformity is termed bullish divergence and often leads to a massive spike in the underlying asset’s price. In this case, it indicates that Optimism price is ready for an explosive move.
A recovery rally above $1.48 is the second sign that bulls are at it. A bounce off the aforementioned level will propel Optimism price to the next target at $1.82. In total, this move would constitute a 31% gain from the current position of $1.39.
OP/USDT 1-day chart
On-chain metrics remain optimistic
One of the most important metric is the Whale Transaction Count. As the name indicates, this index tracks transactions worth more than $100,000. The yellow bars are transactions worth more than $100,000 and the blue bars track transactions worth over $1 million. As seen in the chart, there was a massive spike on May 31 and June 1 after Optimism price dropped 24%. Clearly, this index can be interpreted as whales buying the dip.
 [10.41.19, 06 Jun, 2023]-638216259079519758.png)
OP Whale Transaction Count chart
Furthermore, the Supply Distribution chart shows that whales holding 100,000 to 1 million OP tokens have been on a buying spree since May 14. Their number has increased from 21 to 69, denoting a 228% spike.
Similarly, addresses holding 100,000 to 1 million OP tokens have jumped from 54 on May 30 to 78 as of June 6. These patterns suggest that they are expecting a bullish future for Optimism price.
 [10.14.35, 06 Jun, 2023]-638216259075550274.png)
OP Supply Distribution chart
While all signs point to a bullish future for Optimism (OP) price, investors need to be cautious due to the delicate nature of the lawsuit brought forward by the US Securities and Exchange Commission (SEC) against Binance. The initial reaction caused $311 million in liquidations, and the after-effects of the same could continue to pressure the Bitcoin price lower.
In such a case, a daily candlestick close below the $1.34 support level will create a lower low and invalidate the bullish thesis and potentially trigger a correction to $1.06.
Author
Akash Girimath
FXStreet
Akash Girimath is a Mechanical Engineer interested in the chaos of the financial markets. Trying to make sense of this convoluted yet fascinating space, he switched his engineering job to become a crypto reporter and analyst.
