Key Takeaways:
- Optimism crypto price flatlined at approximately $1.37-1.4 for three days.
- Technical indicators point to a 27% rally.
- On-chain metrics back the prediction, but a bearish hint from the RSI remains.
YEREVAN (CoinChapter.com) – Optimism (OP) token price slid 1% in 24 hours and changed hands at $1.37 in the Asian-Pacific session on Sep 20, continuing the sideways consolidation for the previous three days. However, the token could rise 27% by 2024 due to bullish technicals.
Technicals target OP price at $1.75
Optimism crypto traded within a technical setup dubbed the “falling wedge” since late July, best visible on the four-hour chart below.
A falling wedge is a bullish reversal setup characterized by two descending, converging trendlines. It typically resolves after the price breaks above the upper trendline and grows by as much as the wedge’s maximum height.
Optimism price action confirmed the setup by breaching the resistance on Sep 12. Thus, the target OP price stands at $1.75, a 27% increase from the current value by the year’s end.
Moreover, the chart above showed a Golden cross between the 50-four hour exponential moving average (50-4h EMA; orange wave) and the 100-4h EMA (light blue wave). The golden cross occurs when a short-term EMA crosses above a long-term EMA and predicts a bullish phase ahead.
Notably, the Golden Cross is a result of the price action and cannot be the cause. However, the formation can provide additional support for the asset, as it did in the case of OP.
Additionally, the daily price action chart below demonstrates that OP hit a confluence of support on Sep 19, from its 20-day EMA (red wave), the flat resistance-turned-support at $1.36, and the rising trendline, relevant since July (dash line).
Optimism crypto on-chain metrics back the prediction
Adding to the bullish incentive, the number of OP holders increased by 112,000 wallets in the previous week and totaled at 1.09 million on Sep 20.
The launch of Retroactive Public Goods Funding (RetroPGF) Round 3 might be behind the uptick. In short, RetroPGF offers rewards to “users and builders” on Optimism.
When a user transacts on OP Mainnet, the profits generated from network sequencing are used to fund public goods through RetroPGF.
explains the official website.
The launch could also explain the rise in development activity on Optimism.
Charts flash a bearish hint from the RSI
While the Optimism (OP) token established higher lows since June, the relative strength index (RSI; purple graph at the bottom) printed lower lows.
Such divergence might display a change in momentum before a corresponding change in price. OP’s declining trading volumes could also dampen the bullish expectations. The upcoming sessions will show if OP bulls are ready to double down and take the token to its target price.
