2 October 2023
Optimism (OP) has posted notable gains today, October 2, trading at $1.45, with a 5% increase in the last 24 hours. Furthermore, its price has gained 15% in the last seven days.
OP’s rise coincides with the improvement in the general crypto market, which showed a remarkable recovery. However, whether OP will sustain the ongoing rally remains to be seen. But a close look at a few technical indicators may provide vital insights into its next price moves.
OP Approaches Overbought Zone As Buyers Sustain Rally
OP continues to show positive price momentum as buyers dominate the market. Also, it has formed a fifth consecutive candle on the daily chart, confirming active accumulation by traders. Its rally became prominent on September 29, when it broke above the Donchian Channel (DC) median band.
OP flipped the $1.41 resistance level to support today and edges closer to the upper band of the Donchian Channel towards the $2.50 resistance level. If the buyers sustain the rally above the $1.50 resistance, OP will likely move into the overbought zone.
Additionally, the Moving Average Convergence/Divergence (MACD) has risen above its signal line, displaying a strong buy signal. Also, the Histogram bars are green, confirming that the buyers are still active. More so, the Relative Strength Index (RSI) indicator displays a value of 64.2 and is rising to the overbought region of 70.
Based on these indicators, OP will likely enter the overbought zone in the coming days, implying that accumulation will continue. However, traders should look out for bearish resistance at the $1.50 level that could serve as a potential entry point for sellers.
What Could Be Behind OP’s Recent Gains?
Besides the general recovery in the crypto market, Optimism records exciting developments in its ecosystem. One notable change is a September 29, 2023, proposal to change Optimism’s security model.
According to the proposal, the OP team aims to hand over the admin key for the OP Mainnet to public and decentralized participants. These participants will be the Security Council held accountable for Optimism’s Governance.
Although this proposal awaits approval, it creates engagement in the OP ecosystem, thus increasing investor interest and activity. And this increased activity exerts higher buy pressure on the token.
Furthermore, the Optimism Superchain is another innovation driving ecosystem growth. According to blockchain data provider Covalent, the Superchain is an interlinked blockchain network of individual chains tagged “OP chains.”
Interestingly, builders can use the Superchain to engage in on-chain development. However, they must comply with the Law of Chains, a set of community rules on how teams support public goods and decentralization.
The OP Mainnet is the first member of the Superchain. Again, it has recorded increased daily active addresses, higher than Arbitrum, which is declining in on-chain activity.
BuildOnBase, created by Coinbase, is the second member of the Superchain, aiming to attract billions of users. BuildOnBase ranked as one of the best-performing chains in 2023 and the fastest L2 to reach 100,000 users in 56 days.
These developments are likely driving the growth in the Optimism ecosystem, evident in its recent price surge.