The Optimism (OP) is five days into a recovery rally. Many investors might be full of anticipatory doubt, pondering whether they’ve missed their chance to buy into this Ethereum layer-2 scaling solution. But staring down the barrel, we find possible impediments to further rallies in stubborn resistance levels.
Optimism managed a 5% increase since just yesterday, noticeably grinding upwards in a hard-earned, bounce back renewal – a glint of hope for those still holding the bag. This follows a bruising summer for the layer-2 project, with a sanguinary bleed-out of -28.5% since the advent of May.
Currently trading at a $1.55 market price, a gutsy +1.77% within the past 24 hours, the buoyancy signifies the 5th consecutive day of rally. As recent as August 17, OP re-tested lower trendline support and surged +30%. However, this recovery rally is inching toward a consequential resistance area – the 20DMA.
If Optimism breaches the 20DMA, it could aim for the 200DMA, a lofty standing at $1.91. The last time OP claimed this pivotal level, the 20DMA propped it up for almost a whole month. But if it gets rejected, disaster could strike as there are no safety nets or lower support levels below $1.50 to break a plummet to lower trendline support.
Unsurprisingly, the elements of the recovery rally are worrying Optimism’s indicators – the RSI rapidly heated up to an overbought signal at 52.69. This could necessitate a period of consolidation before an attempt to shatter the 20DMA. Confirming this perspective, the bearish -0.0004 MACD manifests months of downward momentum.
These factors put OP in an unstable technical condition. If the 20DMA flips into support, OP could be eyeing a comeback to a dominating position above the 200DMA at $1.95. On the contrary, a significant threat is forming; 20DMA rejection could set off a jumbled decline to lower trendline support at $1.2. Consequently, Optimism’s unappealing risk: reward ratio sits at 1.14.
However, some optimistic investors might already be diverting their profits into a groundbreaking trading analytics tool. An inventive ecosystem named Launchpad XYZ (LPX) is striving to cut down entry barriers to Web 3.0 with user-friendly tools, insights, and analytics. Including features like NFT discovery, a decentralized exchange (DEX), a Web3 wallet, and utility token analysis, this platform could hold the keys to supercharging investment portfolios and making a lasting dent in the crypto-sphere.
Lastly, remember that the crypto world is high risk. Always invest wisely, and keep yourself well-informed. Your entire investment could be at stake. The crypto world waits for no one; stay in the know and good luck.
Source: Cryptonews
