Optimism has seen bearish action since the beginning of this month. But this week has been much worse for investors and traders. According to Coingeckothe token has fallen more than 12% since last week.
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With a market correction underway, more problems may arise for all portfolios carrying OP. However, there are several reasons why investors and traders should still adhere to Optimism.
Growing network usage by an expanding user base
Price-wise, OP looks like a tough bargain after a month of tough losses from the bears. However, the on-chain data looks very different.
According to data tracked by Nansen, the network’s growth is building to optimism. The platform’s growth as the self-described “Superchain” on Ethereum is working as active addresses continue to increase along with transactions, indicating chain-wide usage across its different constituent chains.
The platform also announced several events that potentially impacted this growth on the network.
Optimism is accommodation an on-chain hackathon tomorrow, July 31st, contributing to this sudden increase in active addresses on the platform. This should offset any shift in investor confidence, as it paints Optimism in a positive light: a platform worthy of development with the support of a growing community.
🟡⚪️Superhack is a Superchain-wide hackathon. 🔵🔴
Sign up and check out team rewards like @worldcoin @base @modenetwork @Celo and more!
Details via link at @ETHGlobalit’s biography.
Apply before July 31st. https://t.co/EBsgKWk9Z2– Optimism (@Optimism) July 26, 2024
The organization also announced The next round of retro funding will reward projects based on three categories: Ethereum Core Contributions, OP Stack R&D, and OP Stack Tools. The event will be rewarded with 8 million OP tokens, which will further help the winning projects increase their impact on the network.
PUMP THIS SHIT UP pic.twitter.com/jySc2uxBnI
— ProfessorAstrones (@Astrones2) July 24, 2024
These metrics contribute to a stronger bullish sentiment among analysts like User X Professor Astronesshowing support for the OP by showing that the token has broken the downward trend it has followed since the beginning of this year.
While confidence in the platform and token is still high, a few things need to happen for OP to see green once again.
Bulls must wait for the perfect moment
At the time of writing, OP bulls have a perfect and stable platform for an upward rocket, and it should be noted that $1,694 is the long-term support level for this move.
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However, its high correlation with Ethereum leaves a lot to be desired. Bitcoin and Ethereum move in sync, meaning that if one feels pain, the other will also suffer. OP’s indirect correlation with Bitcoin will have a major impact on how the token moves in the near future.
With the current market correction, investors and traders should reduce their expectations for a breakout in the coming days. However, the strong support at $1,694 gives the bulls a stable platform to move higher.
Should the bulls lose this position, expect more pain in the coming days or weeks. But if the level holds strongly, $2,331 will be the target level for the bulls.
Featured image from Pexels, chart from TradingView