Forecasts Suggest Optimism (OP) Price Could Experience a Sharp Decline of Over 20% in the Near Future
The Optimism (OP) price has broken down below a horizontal range, which could lead to further declines in the near future.
Breakdown of the Horizontal Range
The Optimism (OP) price has been trading within the range of $3 to $4.2 since breaking above the resistance zone at the previous all-time high of $3 on December 22, 2023. Confining the range after a breakout is a positive signal and often leads to a continuation of the uptrend.
However, instead of doing so, the OP price broke down below the range on January 22, 2024. This action has formed a bull trap, and a selling wave may follow.
The daily RSI indicator has invalidated the hidden bullish divergence (blue line) and is below 50. Both are bearish signals, supporting the possibility of further declines.
Therefore, the OP price could decrease to the next significant support level at $2.2, corresponding to a 22.14% decrease from the current price.
The 4-hour chart supports the bearish outlook from the daily timeframe. It shows that the OP price has broken down below a descending parallel channel and is currently confirming the channel’s support line as resistance (red arrow).
The 4-hour RSI is below 50 and sloping downward, indicating that the bears have taken control of the market.
Thus, the OP price seems poised for further declines.
The most likely scenario suggests that the OP price will continue to decrease in the near future. The potential target for this movement is $2.2.
The bearish outlook would be invalidated if the OP price reclaim the support of the previous range at $3.
Disclaimer: Please note that this article is for informational purposes only and should not be taken as investment advice. As an investor, it is important to do your own research before making any decisions. We are not responsible for any investment decisions you make based on this information. Not Financial Advice.
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