Optimism, a second layer solution on the Ethereum blockchain, has gained traction with a TVL value of over $1.22 billion.
- OP price is currently forming a bullish cup pattern, which indicates a recovery potential.
- Trading activity picked up in the bullish cryptocurrency market, which indicates an attempt by OP price to rebound.
Optimism: a quick look
As a layer 2 blockchain solution, transactions are recorded on the Optimism blockchain and then stored on the Ethereum blockchain.
While developing the Optimism Layer 2 solution, the focus was on reducing complexity. This approach aims to achieve efficient scalability on Ethereum.
Its compatibility with the Ethereum network allows developers to deploy their decentralized applications (dApps) and smart contracts on Optimism’s Layer 2 infrastructure. By moving transactions from the mainnet of Ethereum, the OP aims to reduce transaction costs and relieve network congestion, making transactions more cost-effective and efficient for users.
The project uses various security mechanisms, including fraud proofs and challenge periods, to ensure transaction integrity and prevent malicious activity within the Layer 2 network.
Moving averages and RSI signals
Through the price predictions, there are signs that the price of the OP token is trying to recover. Optimism is building now Bullish cup pattern on the daily timeframe.
However, it should be noted that the OP coin is currently trading below the important moving averages, which may challenge the buyers to overcome the significant resistance levels.
For us to witness an optimistic price breakout, a significant level of buyer support is required.
Also, there has been a significant uptick in social engagement related to the project.
In the past week, the price of the OP token increased by 25.65% with a positive increase in trading activity as buyers and sellers are actively participating in the optimistic cryptocurrency market. The 24-hour trading volume witnessed a growth of 34.66%.
Technical analysis of price optimism
Currently, OP price is trading below the 200 Exponential Moving Average (EMA), with the 50 EMA acting as immediate resistance.
To notice the possible increase in the price of OP, it is important that the RSI line successfully crosses the resistance presented by the middle line.
The RSI value of OP token stands at 57.43 points and its line finds support from the 14-level simple moving average (SMA) at around 36.51 points.
At the same time, the %K and %D line of the Stochastic RSI indicates a possible negative crossover. The current value of the RSI stands at 90.73 points.
According to the analysis, there has been a significant spike in trading activity between buyers and sellers in the bullish cryptocurrency market, which indicates an attempt by OP price to make a recovery.
Featured image from iStock, charts from TradingView.com