Optimism price dip over the month leaves nearly 100k new investors struggling to recover

Optimism price has been dwindling per the broader market cues, rallying and correcting over the past few weeks. While this may be just another day in the market for long-term holders, short-term traders could get spooked by this. Especially the almost 100k new investors that recently joined the network.

Optimism price takes a hit

Optimism price trading at $1.23 has noted a decrease of 7.48% in the span of a month. The increasing bearish momentum resulted in the altcoin noting a decline of nearly 7.42% during the intra-day trading hours today. OP nevertheless recovered to only fall by 3.4% at the time of writing.

The cryptocurrency could, however, be looking at further decline since the Moving Average Convergence Divergence (MACD) indicator is signaling a bearish turn for the altcoin. Observing a bearish crossover, the signal line (red) moved over the MACD line (blue), with the histogram showing red bars.

This could result in Optimism price falling to test the support line at $1.21, and losing this support could send the cryptocurrency to a four-month low of $1.13.

OP/USD 1-day chart

However, on the off chance that OP recovers and bounces off $1.21, it would be looking to breach the barrier at $1.36. This line coincides with the 50-day Exponential Moving Average (EMA), and reclaiming it would invalidate the bearish thesis, setting OP off to tag $1.40.

The chances of a recovery are bleak

Looking at the state of the market, it seems rather unlikely that the investors would be willing to support the altcoin to initiate a recovery. The lack of optimism will cost Optimism price its recovery rally. This is evident from the 91k investors that the network added a month ago. 

The total addresses witnessed an increase from 844k to 935k in the span of 48 hours on September 14. Their profitability since then has been dwindling. 

Optimism total addresses with a balance

Initially, the short-term holders were doing rather well and made some more profits as OP hit the $1.40 mark at the beginning of October. Since then, the drawdown has left them underwater and the supply vulnerable.

Looking at the change in supply, it can be noticed that the day those 91k addresses joined, short-term traders’ holding noticed an increase of 170 million OP worth over $204 million. While this does not represent a major chunk of the supply, it is still substantial enough to cause a rise or decline in the price. 

Optimism balance by time held

Thus, if investors plan to sell their holdings to offset their losses, Optimism price might witness a much more significant decline.