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Why Optimism (OP) Price Might Slip Below $2 Soon

source-logo  beincrypto.com 15 May 2024 17:26, UTC

At the time of writing, optimism’s (OP) price is below the uptrend line that it has been above since mid-April.

The altcoin is failing to find support from the rest of the market, and to make matters worse, it will not see any support from Bitcoin either.

Optimism and Bitcoin Are Not in Line

Optimism’s price is seeing extended bearishness owing to the lack of support from its investors. Generally, Bitcoin acts as the savior for these altcoins as its rally also catalyzes recovery for altcoins.

However, OP is far from this, too, given that the altcoin shares a negative correlation with Bitcoin. This means that even when Bitcoin’s price rises, Optimism’s price won’t since it is moving inversely to BTC’s price actions.

Optimism Correlation with Bitcoin. Source: IntoTheBlock

Thus, as the broader market recovers along with Bitcoin, Optimism’s price will fail to see growth. Instead, it could fall lower.

The bearish cues are dominating the price action. The Moving Average Convergence Divergence (MACD) indicator highlights the potential for a decline.

The MACD is a popular technical indicator that measures the relationship between two moving averages of an asset’s price, signaling bullish or bearish momentum shifts. Crossovers between the MACD line and its signal line indicate potential buy or sell opportunities.

Read More: Optimism vs. Arbitrum: Ethereum Layer-2 Rollups Compared

Optimism MACD. Source: TradingView

Over the last three days, this indicator formed a bearish divergence, which suggests that the price decline could extend further. Should this happen, Optimism’s price could drop to $2.0.

OP Price Prediction: Corrections May Continue

At the time of writing, Optimism’s price is $2.43, above the support level at $2.33. Ten days ago, the altcoin failed to successfully note a golden cross after the 50-day Exponential Moving Average (EMA) could not cross over the 200-day EMA.

The above conditions suggest a bearish outcome, which could send OP to $2.11. If OP falls below this, it could lose the crucial psychological support of $2.00.

Read More: What Is Optimism?

Optimism Price Analysis. Source: TradingView

However, if Optimism’s price bounces back, it could reclaim $2.50 as support. This would enable a recovery to $2.82, which could help bring back the profits investors lost over the past few days.

Breaching this level would invalidate the bearish thesis, pushing OP back toward $3.0.