Calculating the odds of Optimism [OP] sliding down to $2 this week
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
Optimism [OP], at press time, was trading near its lowest point, a level it reached on 5 March. Following the weekend dump, the price bounced to the $2.5-zone but faced rejection around that area of resistance. The bounce in price coincided with the update that Optimism recently shared regarding the Goerli nodes.
Read Optimism’s [OP] Price Prediction 2023-24
Owing to the uncertainty around Bitcoin and the sentiment across the market, it appears likely that OP could see further losses over the next two weeks. And yet, another bounce towards $2.5 can not be discounted.
Source: OP/USDT on TradingView
The 4-hour charts showed a clear break in the market structure on 3 March, when a higher low on the chart was breached. The same level was later retested as resistance before further losses. At press time, the price sat atop the most recent lower low at $2.25, one marked by the dotted white line.
Two scenarios could unfold in the coming days. One was a bounce in price towards the $2.5-mark to revisit the previous bearish order block before the next move south. The next scenario would be a straight drop below $2.25, one which would be indicative of aggressive selling across the market.
Hence, there are two possible trades – A more conservative approach would be to wait for OP to retest the bearish order block at $2.45-$2.55. A rejection from that zone could be used to enter a short position, with invalidation above $2.59.
On the other hand, aggressive selling in the coming hours could push OP under $2.25. In that scenario, a retest of the $2.25-$2.4 region can be used to short the asset.
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