Optimism, a layer-2 solution on the Ethereum blockchain, has gained traction with a TVL of more than $1.22 billion.
- OP price is currently forming a bullish cup pattern, indicating a potential recovery.
- Optimistic trading activity in the crypto market has surged, suggesting OP price testing to reverse.
Optimism: A Quick View
As a layer-2 blockchain solution, transactions are recorded on the Optimism blockchain and then stored on the Ethereum blockchain.
During the development of Optimism’s Layer-2 solution, the focus was on minimizing complexity. This approach aims to achieve the efficient scalability of Ethereum.
Its compatibility with the Ethereum network, allows developers to deploy their decentralized applications (dApps) and smart contracts on the Optimism layer 2 infrastructure. By moving transactions from the Ethereum mainnet, OP aims to reduce transaction costs and relieve network congestion, making transactions cheaper and more efficient for users.
The project uses various security mechanisms, including fraud proofs and challenge periods, to ensure the integrity of transactions and prevent malicious activities within the layer 2 network.
Moving Averages and RSI Signals
As shown in the price predictions, there are signs that the OP token price is trying to recover. Optimism is currently forming a bullish cup pattern on the daily timeframe.
However, it is worth noting that the OP token is currently trading below key moving averages, which will be a challenge for buyers to overcome key resistance levels.
To witness a strong Optimism price breakout, a significant level of buyer support is required.
In addition, there was a noticeable increase in social engagement related to the project.
Last week, the price of the OP token increased by 25.65% with a favorable increase in trading activity as buyers and sellers actively participated in the crypto optimism market. The 24-hour trading volume saw an increase of 34.66%.
Technical Analysis Price Optimism
Currently, OP price is trading below the 200 Exponential Moving Average (EMA), with the 50 EMA acting as immediate resistance.
To observe a potential OP price increase, it is important for the Relative Strength Index (RSI) line to successfully overcome the resistance provided by the median line.
The RSI value of the OP token stands at 57.43 points and its line is looking for support from the 14 Simple Moving Average (SMA) level at approximately 36.51 points.
Meanwhile, the %K and %D lines of the stochastic RSI indicate a potential negative crossover. The current value of the stochastic RSI stands at 90.73 points.
According to the analysis, there is a remarkable surge in trading activity between buyers and sellers in the optimistic crypto market, which suggests a test of the OP price to make a rebound.
Featured image from iStock, charts from TradingView.com
