As a seasoned analyst with over two decades of experience in the crypto markets, I’ve seen my fair share of bull runs and bear markets. The current situation with Optimism (OP) presents an interesting case study.
Optimism price is recovering from a significant 13% drop between October 7 and 10, fueled by general market conditions. The announcement of an Optimism airdrop from the Optimism Foundation, coupled with the unexpected U.S. CPI data, initially had negative effects on the price. However, the OP price has begun to recover. Could the airdrop launch trigger a 23% rise to $2?
How Will A 10M Airdrop Impact Optimism Price?
On October 9th, it was revealed that the Optimism Foundation would conduct its fifth token distribution event. A total of 10.3 million OP tokens are set to be allocated across approximately 54,000 recipient addresses.
Use the Superchain, and reap the benefits
Today, @Optimism unveils Airdrop #5:
Onchain together, benefit together.
10M+ OP has been allocated to 54k+ unique addresses.
As of today, roughly 550M OP remains for future airdrops.
— Optimism (@Optimism) October 9, 2024
After the announcement, the Opening Price (OP) fell by 11% due to a broader decline in cryptocurrency values. Yet, the recent market trends indicate a surge, suggesting potential increases in value within the following days.
Based on information from IntoTheBlock, the number of active addresses on the Optimism network surged to approximately 38,000 following the announcement. This marks the highest point in the past year.
The rise in the count of accounts with no balance implies that some of the 54,000 addresses who got the airdrop might have sold off. This could potentially be why the OP‘s price decreased. Interestingly, Optimism’s price is displaying positive trends as it completes the first part of a double-bottom reversal pattern.
The OP price has increased by 3.8% in the last 24 hours and is trading at $1.58.
OP Price Analysis: All Eyes on $2, But There’s A Catch
According to the presented price chart, there seems to be a developing bullish trend reversal pattern known as a “double bottom.” This particular pattern indicates a possible shift from the current bearish trend towards a bullish one. The significant resistance level for this change is estimated around $1.73, which is also where the neckline has been marked.
If we surpass this horizontal line, it will suggest a reversal and could signal a substantial increase in price.
A bullish candle is forming off the second low (right leg), showing buyers stepping in. If the Optimism price continues upward, the next major move is a breakout through the neckline.
Moreover, the Relative Strength Index (RSI) currently stands at 47 and appears to be rising, indicating a decrease in selling pressure for OP. If it surpasses 50, this would suggest that a strong bullish trend, or a full-on rally, has started on Optimism.
The projected price target for this double-bottom breakout is around $1.90—$2.00, based on the height of the pattern (the difference between the neckline and lowest point). If the bullish reversal holds, the price could retest $2.00 and move higher to $3.17.
If Optimism’s price doesn’t manage to surpass $1.73, we might observe a holding pattern or even a drop to lower prices. The significant support region is approximately $1.47, which marks the pattern’s lows and could be a robust level for potential buyer interest. If the price dips to this point and breaks below, it might challenge the current bullish outlook, suggesting that bears continue to dominate the market.
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2024-10-11 13:27