Optimism (OP), a popular layer-2 blockchain solution for Ethereum, has been on a steady decline. After trading near $2.70 just a month ago, the cryptocurrency has shed significant value, with its current price hovering around $1.67. With bearish sentiment dominating the market, many investors are wondering if the token will dip further or if a rebound is in the works. Experts are divided, but a few key indicators suggest a possible dip to $1.58 before any potential recovery.
As of January 22, 2025, OP has dropped by 8.67% in the last 24 hours alone, extending its losses on both the weekly and monthly charts, with declines of 4.29% and 5.28%, respectively. This sustained downtrend has raised concerns among investors and market analysts alike, fueling debates about whether the coin has hit rock bottom or whether it will continue to fall.
According to market analysis, there are several signs pointing to further bearish momentum for Optimism. The recent price action has shown a series of “bearish crossovers” on key technical indicators like the Stochastic Relative Strength Index (Stoch RSI) and the Relative Vigor Index (RVGI).
Another concerning signal comes from the decline in active addresses on the Optimism network. Over recent weeks, the number of users interacting with the network has sharply decreased. This suggests that fewer people are actively participating in transactions on the blockchain, which may be a sign of waning interest and confidence in the platform.
Data from blockchain analytics firm Santiment points to a notable drop in user activity, further compounding the bearish sentiment surrounding OP. Additionally, when adjusted price divergence activity (DAA) turns negative, as it has recently for Optimism, it signals that network activity is weak and adoption rates are stagnant, which can weigh heavily on the token’s price.
One of the other significant trends that could impact OP’s price is the recent surge in netflows. Netflows refer to the movement of assets into and out of cryptocurrency exchanges, and a rise in positive netflows generally signals increased selling pressure.
According to data from IntoTheBlock, Optimism’s total netflows have turned positive in recent days, suggesting that more traders are moving their assets onto exchanges—likely in preparation for further price drops. This could lead to more selling activity, pushing the price even lower in the short term.
Despite the current bearish outlook, there are some analysts who believe that Optimism may be poised for a rebound. Notably, cryptocurrency expert Ali Martinez has suggested that if OP reaches a local bottom, it could rebound to $3.50 in the future. This would represent a significant recovery from its current price, which has seen a marked decline over the past month.
However, this potential rebound is contingent on several factors. In the short term, OP is still facing significant selling pressure and a lack of new bullish catalysts. Therefore, analysts predict that the price could drop further before any signs of a recovery materialize.
One possible support level for OP is $1.58, which some believe could mark the lowest point in this current cycle. If the price dips to this level, it might trigger a reversal and a gradual climb back toward higher price points. In the event of a short-term rebound, the immediate target would be reclaiming the $1.83 mark, which would suggest that the worst is over.
As the situation stands, Optimism is caught between strong selling pressure and the possibility of a price rebound. Investors should keep a close eye on the following key indicators to gauge the future direction of the asset:
The short-term outlook for Optimism remains uncertain, with bearish trends continuing to dominate the market. While some analysts suggest that a dip to $1.58 could be likely, others believe a rebound could occur once the market stabilizes. Regardless of the immediate direction, investors will need to monitor technical indicators, network activity, and overall market conditions closely to understand where Optimism is headed next.
As the cryptocurrency market remains volatile, it’s important for investors to remain cautious and informed, ready to react to new developments as they unfold. Only time will tell if Optimism will recover and reclaim higher prices or if the bearish pressure will continue to weigh it down in the coming weeks.
Get the latest Crypto & Blockchain News in your inbox.