Optimism price could fall in the wake of $33.34 million worth of OP tokens flooding markets in a cliff unlock
|- Optimism price is up 15% in the last week, recording higher highs to reclaim early October highs.
- The rally could be cut short with 24.16 million OP tokens worth $33.34 million due to flood the market soon.
- Token allocation will go to investors and core contributors; they are expected to book early profits.
- A decisive candlestick close above the $1.723 level would confirm the uptrend.
Optimism (OP) has been overly volatile over the past several months, with the price action oscillating in a wave-like motion. Momentum indicators have mirrored this outlook as investors ride the trend. Meanwhile, key developments in the OP network have played critical roles in determining the upside potential.
Also Read: Optimism spikes 5% ahead of upcoming token unlock
Optimism price 15% gains could be written off soon
Optimism (OP) price surged 15% in the last week, recording higher highs before facing opposition from the $1.449 resistance level. Countered by selling pressure from this supplier congestion level, it appears momentum is dropping for OP, indicated by the falling Relative Strength Index (RSI).
Increased selling pressure could see Optimism price drop further towards the $1.231 support level, a 10% drop from the current value. In the dire case, the slump could see OP dwindle further to collect buy-side liquidity resting underneath.
OP/USDT 1-day chart
Nevertheless, the position of this momentum indicator still supports the case to the upside. For a confirmed uptrend, however, Optimism price must shatter the $1.449 resistance level and ascend to the supply zone extending from $1.653 to $1.818. Confirmation will happen after the price makes a decisive move above the midline of this order block at $1.723.
A breach of the aforementioned level, signifying the conversion of a supply zone into a bullish breaker, would clear the path for a move towards the $2.000 psychological level, 45% above current levels.
OP tokens worth $33.34 million to flood markets
Meanwhile, the Optimism network has a cliff token unlocks due on October 30. The event will see 24.16 million OP tokens worth approximately $33.34 million flood the markets as the allocation will go to investors and the core contributors on a 47:53 ratio. These recipients are likely to cash in for quick profit.
OP Unlocks
It is worth mentioning that in the previous unlock event, allocations were similar with investors and core contributors receiving the mentioned number of tokens. Around the event, Optimism price recorded significant volatility within two weeks of the event. If history repeats, the Layer-2 (L2) token’s market value could fall 15%, potentially finding support at around $1.231.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.