- Optimism price is trapped within a formidable supplier congestion zone as rival Layer 2 token airdrops.
- Event-related hype could send OP down 12% to $2.150.
- A decisive flip of the support provided by the uptrend line at $2.475 could invalidate the bullish thesis.
Optimism price (OP) has been moving horizontally within a fixed supplier congestion zone and could break out soon. The expected trajectory for OP comes amid an alt season with rival Ethereum Layer 2 (L2) token Arbitrum holding its airdrop event. If event-related hype stirs things in the OP market, the altcoin could finally make the much-awaited run.
Optimism price could dip 12% amid Arbitrum-related hype
Optimism price could respond to the hype around Arbitrum’s ARB token airdrop, causing it to lose more value and record losses for investors. The expected directional bias comes as the two tokens are key players and tight competitors as the largest L2s using Optimistic roll-up technology to scale Ethereum.
Investor interest around Arbitrum’s new milestone could inspire an increase in selling pressure in the OP market as investors opt to switch to ARB. Such interest would come, presumably, because of the ‘Coinbase effect’, where token listing causes a bigger price pop for ARB. Traders looking to take advantage of the expected rally in the Arbitrum market would sell their OP positions in favor of ARB, causing Optimism price drop.
In such a move, Optimism price could shatter below the immediate support at $2.428. Such a move could send the altcoin to a cliff, with the next shed expected around the 2.288 support level.
Optimism price could plunge further in extreme cases, tagging the March lows around $2.150. Such a move would denote a 12.83% drop from current levels.
OP/USDT 4-hour chart
Conversely, if the hype around the Arbitrum airdrop draws investors towards L2 tokens, this could inspire a northbound move. In this regard, the Optimism price could rise above the immediate psychological resistance around $2.532.
If bullish momentum increases above this level, the token could shatter the resistance confluence between the horizontal and the downtrend lines at $2.613. Breaching past this supplier congestion zone could lay out the path for the altcoin to rally north toward the psychological resistance level at $2.910.
Optimism price could recover the February highs around the $3.020 resistance level in highly bullish cases. Such a move would constitute a 23.01% ascent from current levels.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
LINK price jumps 10% as Chainlink races toward tokenization of funds
Chainlink (LINK) price has remained range-bound for a while, stuck between the $16.00 roadblock to the upside and $13.08 to the downside. However, in light of recent revelations, the token, which powers the verifiable web of the decentralized computing platform, may have further upside potential.
Gaming token Notcoin down by almost 50% after airdrop launch
NOT experienced a rapid decline hours after its anticipated launch on Thursday, shedding almost 50% of its value. This continues the cycle of huge selling pressure faced by cryptocurrency airdrops after their launch, especially the launch of gaming tokens in recent times.
Ethereum drops below $3,000 again, spot ETH ETF sparks debate in crypto community
Ethereum again went below the $3,000 key level on Thursday after posting signs of a rally. The price action follows predictions from the community regarding the SEC's decision on spot ETH ETFs next week.
SUI price defends $0.8880 amid multiple Sui network integrations
Sui (SUI) price failed to heed to the broader market recovery on Wednesday, extending the fall to the $0.8880 support level. However, with multiple network integrations in the works, the altcoin has pivoted around this level and is scaling a recovery.
Bitcoin: Why BTC is close to a bottom
Bitcoin (BTC) price efforts of a recovery this week have been countered by selling pressure during the onset of the American session. However, the downside potential appears to have been capped.