- Michaël van de Poppe advises caution buying Optimism (OP), suggests $1.85-$1.935 entry.
- OP price correlates with Ethereum, surges 23.25% in 24 hours.
- OP overbought with RSI at 74.82, potential retracement anticipated.
Michaël van de Poppe, a cryptocurrency investor and the creator of MN Trading, advised his X number of followers to exercise caution when purchasing Optimism
Van de Poppe further mentioned that OP is expected to mirror the price movements of Ethereum
OP Echoes Ethereum, the Top Crypto Leader
When examining the price movements of OP and ETH on December 7, the analyst’s viewpoint appeared to be credible. Data from CoinMarketCap shows that ETH peaked at $2.375 on that particular date, with other alternative cryptocurrencies also experiencing increases.
However, the Optimism token, which is fundamentally focused on Ethereum scaling, experienced a double-digit surge. Currently, the price of OP stands at $2.16, marking a 23.25% rise over the past 24 hours.
The correlation between the two cryptocurrencies was evident in their movements. Consequently, an increase in ETH would probably result in a similar uptick in OP. Similarly, Arbitrum
OP’s Reversal: A Potential Opportunity
At the time of this report, the Relative Strength Index (RSI) suggested that OP was in a state of being excessively purchased. The RSI value, as seen on the 4-hour chart for OP against USD, stood at 74.82. Should the purchasing pressure for OP intensify and the price of ETH persist in its upward trend, the RSI value might reach 80.00.
Nonetheless, should this situation occur, the reading might establish a basis for a retracement of the OP. In addition, the robust support at the $1.72 mark might stop the OP price from dropping below this threshold, regardless of any profit-taking.
Coin Edition also examined the Auto Fibonacci Retracement. An analysis of the technical indicators indicated that the 0.236 Fibonacci level was approximately $1.80. This suggests that a minor retracement to this level might occur.
Consequently, initiating long positions between $1.80 and $1.85 might be acceptable for traders. The reason is that a potential upward trend reversal might occur if the price of OP reaches anywhere in that specified range. At the same time, traders appeared to be indifferent to the fact that OP was in an overbought condition.
Based on data from Coinalyze, the funding rate for OP stood at 0.034, indicating that there was still a strong bullish sentiment in the market. Furthermore, the combined estimated funding rate reached $0.047, signifying that more contracts associated with OP were expected to favor a bullish orientation.
If the selling pressure escalates, OP might fall under $2. Nonetheless, the token’s value will probably rise after a brief period.
Disclaimer: The insights, perspectives, and data presented in this price analysis are published in good faith. Readers must conduct their own research due diligence. Any decision made by the reader is solely their responsibility, and Crypto Outlooks shall not be held responsible for any consequential or incidental harm or loss.
