Optimism price slips under critical support as $40 million worth of OP due to flood market Thursday


Share:
  • Optimism network will be unlocking 24.16 million OP tokens, constituting 2.74% of total supply, on November 30.
  • Worth $40.59 million at current rates, the cliff unlock event is poised to trigger volatility in the L2 token’s price.
  • OP could drop amid increased supply, with token allocations going to investors and core contributors who may cash in.

Optimism (OP) price has slipped below a critical support level, coming on the back of increased volatility ahead of a bearish catalyst expected in the Optimism network on November 30.

Also Read: Optimism Price Forecast: OP to correct 15% as sell signs multiply

Optimism price prepares for voluminous token unlock

Optimism (OP) price has dropped 5% in the last day, but trading volume is up a stark 15% over the last 24 hours as of press time. The disparity comes amid expectations of more tokens in the OP market relative to what traders are willing to buy at current prices.

Based on the token unlock calendar, the Optimism network will be unlocking 24.16 million OP tokens worth approximately $40.59 million on November 30. The dump constitutes 2.74% of the network’s supply, with allocations going to investors and core contributors, who are expected to cash in for quick profit.

OP unlocks

During previous unlocks, the event triggered volatility in the Optimism price, oscillating at least 10% in either direction before and after the event.

Optimism price prediction ahead of massive token unlocks

Optimism price has fallen back below the mean threshold of $1.723 of a supply zone extending from $1.653 to $1.818. Based on the outlook of the Relative Strength Index (RSI), OP could fall further, with the bears steadily strengthening their position in the market.

The inclination of the RSI to the south shows buying pressure is fading relative to selling pressure, possibly as investors flee to avoid being caught as part of exit liquidity. In the same way, the Awesome Oscillator (AO) is edging to the south as red-hot histogram bars show the bears gaining ground.

Increased selling pressure could see Optimism price extend the fall, falling outside the grip of the supply zone at $1.818 to test the $1.600 psychological level. If this floor fails to hold as support, the slump could extend to tag the $1.449 support floor, 15% below current levels.

OP/USDT 1-day chart

On-chain metrics to support the bearish case for Optimism

On-chain data from Santiment shows that Tether (USDT) stablecoin market capitalization has been waning, suggesting there is no fresh capital flowing into the OP market. With it, the daily active addresses have also dwindled, showing the number of daily unique addresses involved in OP transactions continues to reduce. Crowd interaction around OP is fading as well.

OP Santiment: USDT market capitalization, daily active addresses

In the same way, network growth is declining, showing the number of new addresses being created is dipping. Transaction count and transaction volume metrics are dwindling with investors shunning OP amid increased risk in the market. These metrics show the aggregate amount of OP tokens across all transactions that happen on the network daily.  

OP Santiment: Network growth, transaction volume, transaction count

On the other hand, a resurgence by bulls could send Optimism price north, reclaiming the mean threshold of $1.723 back as support and potentially extending past the upper boundary at $1.653. In a highly bullish case, the gains could extend north for OP market value to tag $1.800, 7% above current levels.

In highly ambitious cases, Optimism's price could reach higher, clearing the local tops to tag the $2.000 psychological level.


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.

Join Telegram

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content


Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended Content

Editors’ Picks

PEPE price inches closer to 2024 peak with top crypto exchanges teasing PEPE memes on X

PEPE price inches closer to 2024 peak with top crypto exchanges teasing PEPE memes on X

PEPE’s social dominance and relevance have been increasing since February 20. This week, top cryptocurrency exchanges have shared PEPE and related memes in tweets on their official X handle. 

More PEPE News

SEI, Omni Foundation propose standard to unify Ethereum NFTs

SEI, Omni Foundation propose standard to unify Ethereum NFTs

SEI and Omni Foundation could help NFTs across the Ethereum ecosystem transition to scaling solutions and rollups. The two have proposed a new token standard, xERC-721, with a “code minimized” upgrade to the current standard. 

More Cryptocurrencies News

Bitcoin Weekly Forecast: BTC likely to correct to $50,000 soon

Bitcoin Weekly Forecast: BTC likely to correct to $50,000 soon

Bitcoin price has formed a potential top signal that forecasts a sell-off. The weekly chart also points to a bearish divergence, which adds credence to the bearish outlook. Investors can expect BTC to consolidate between the $52,062 to $45,160 levels.

More Bitcoin News

XRP price plunges as Kraken cites SEC v. Ripple lawsuit in its legal battle against the regulator

XRP price plunges as Kraken cites SEC v. Ripple lawsuit in its legal battle against the regulator

XRP price inches closer to support at $0.52 after the recent developments related to the SEC’s lawsuit against Ripple. Kraken cited a key part of the SEC’s lawsuit against Ripple that could impact the outcome of its own legal battle against the regulator. 

More Ripple News

Bitcoin: BTC likely to correct to $50,000 soon

Bitcoin: BTC likely to correct to $50,000 soon

Bitcoin price has formed a potential top signal that forecasts a sell-off. The weekly chart also points to a bearish divergence, which adds credence to the bearish outlook. Investors can expect BTC to consolidate between the $52,062 to $45,160 levels.

Read full analysis

BTC

ETH

XRP