Optimism price skyrockets by 37% in a day as it onboard first L2 network to its Superchain

Optimism price surprised the market with an exceptional rally before the weekend. The impact of the rise in market price was felt more by bearish traders than optimistic investors as millions of dollars worth of shorts contracts liquidated in a day. However, the altcoin managed to mark a new year-to-date high before 2024 begins.

Optimism Superchain finds takers

Optimism announced in its weekly recap that it found the first chain, Lisk, to commit to its Superchain vision. The Superchain thesis, put simply, is the proposition of connecting multiple layer-2 networks. This can be achieved by sharing a common development stack, which would enable them to cohesively communicate and function as one unit. 

This would improve the overall transaction speeds, reduce the cost of settlement, and make L2 communication far smoother. The news of this collaboration likely contributed to the investors' bullishness, which ended up hurting the bears considerably.

According to the liquidation data obtained from derivatives analytics platform Coinglass, Optimism traders witnessed the liquidation of $4.03 million worth of shorts contracts. This is the highest single-day liquidation in the past three months and is over four times larger than the long contracts liquidated on the same day.

Optimism liquidation data

Shorts contracts liquidating means that the traders betting on the price of the asset falling have experienced a dent in their overall profits thanks to the price moving sharply in the upward direction.

Optimism price makes a splash

Optimism price is trading at $3.369 after slightly correcting by 3% in the past hour. The correction was expected since, in the past 24 hours, the L2 token charted a 37.18% growth, which pulled the price up from $2.528 to $3.468 in a single day. Consequently, the overall increase witnessed in the past week has touched 66%.

The price indicators are exhibiting bullishness, but by the looks of it, OP seems to be overbought at the moment. Generally, this points towards an overheated market, which results in slight corrections until the market cools down.

This could likely bring Optimism price down to $3.105, which would provide support to prevent further decline. This price is the former year-to-date high, and counting off this line would also secure the recent gains registered by the cryptocurrency.

OP/USD 1-day chart

However, if the investors continue to act bullish over the weekend, Optimism price could witness further increase. As is, the altcoin has marked a new 2023 high; breaching the $3.500 mark would invalidate the bearish thesis and also lead to new highs before 2024 begins.