YEREVAN (CoinChapter.com) – Optimism token OP jumped 15% on Feb 24 and changed hands at $3.1, bringing its year-to-date gains to over 250%. Meanwhile, the token price approached key resistance that could hinder the bullish continuation in the current session.
OP at key resistance
OP token has traded within a pattern known as the ‘rising channel’ since Jan 2023. It features two parallel rising trendlines which connect the swing highs and lows through consecutive support and resistance retests.
The rising channel does NOT predict a bias after the asset breaks the formation in any direction. However, it is instrumental in determining short-term fluctuation directions.
As seen in the chart above, the OP token retested the channel’s resistance after the mentioned bullish intraday move. Thus, if the Optimism bulls don’t put enough weight behind the rally, the token will likely take a step back and decline to the channel’s mid-range before another breakout attempt.
Also read: Arbitrum TVL nears $2B as layer 2 flips Ethereum in number of transactions.
If the downward correction follows, a likely short-term target for OP will stand at $2.7. The declining trading volumes after the Feb 23 spike testify to the prediction. However, if Optimism bulls double down, they could push the asset beyond the resistance in the European session.
Meanwhile, on-chain metrics are also important to consider.
Optimism TVL pared Q4 2022 losses
Optimism is an Ethereum layer-two solution, much like Arbitrum. Both were designed to take the pressure off the Ethereum mainnet by supporting faster transactions.
Moreover, Arbitrum flipped its mainnet in the number of transactions for the first time ever on Feb 23 and elevated its total value locked (TVL) back to March 2022 highs. Optimism did not lag either and brought its TVL to $901 million on Feb 24, an 80% uptrend year-to-date.
Its top DEX Velodrome also kicked its TVL up 128%, bringing dominance on the Network to 32% on Feb 24.
Meanwhile, the transactions chart also supports the bearish scenario, showing a downward correction after a peak on Jan 12 at 800,000 transactions. The Feb 24 number stood at just over 309,000 transactions.
Also read: Optimism (OP) Forms New ATH But Rally Unlikely To Sustain
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