OP, the native token of Optimism, broke out of an uptrend after setting a new all-time high of $4.87. The price has continued to drop since then, and currently points to a continuous downward drop.
Analysis of the crypto asset’s trend indicates that the price is on a downtrend which is currently trading below the 100-day Moving Average (MA) and the trend line. However, at the time of writing, Optimism was trading at around $2.9 and was up by about 1.22%.
As a result of this change in trend, two major resistance levels were formed at $4.87 and $4.04, and a support level of $2.95. But currently, the price has broken past this support level.
Technical Indicators Point Toward A Continuous Downtrend For Optimism
When analyzing OP’s price movement using the daily candlestick timeframe, we can see that after a drop from its all-time high, the token was unable to bounce back. This has led to the price trading below both the trendline and the 100-day moving average as can be seen in the below image.
Based on this recent change in trend and shift in momentum, Optimism could be poised for a continuous downward move, especially in the context of the fact that the general crypto market is experiencing a drop.
A further look at the price using the MACD indicator in the daily timeframe shows that the MACD line and the signal line have crossed, trending below the zero line. Meanwhile, the MACD histogram is also trending below the zero line. This MACD formation indicates a strong downward momentum.
A final look at the chart with the Bull power vs. Bear power indicator from the daily timeframe reveals from the histogram that sellers have completely taken over the market. Consequently, buyers have gradually lost momentum to push the price upward.
How Low Can OP Go?
If the price of Optimism continues to rally in the downward direction, there could be a price break out below its previous support level of $2.61. Also, it could be possible that the price could move even further toward achieving a new support level.
However, with the history of the exponential growth associated with OP, If the price fails to break or move below its previous support level of $2.61, a new upward trend could begin therefore propelling the price up to retest its previous resistance levels.
Featured image from Shutterstock, chart from Tradingview.com