- Optimism on-chain metrics flashed bearish signals while OP price climbed to $3.61 on Sunday.
- OP whale transactions coincided with network realized profits, a sign of profit taking by large wallet investors.
- OP price is likely to correct after yielding nearly 65% weekly gains for holders.
Optimism, a low-cost Ethereum Layer 2 chain has offered nearly 4% daily and 65% weekly gains to holders. OP price is $3.61 at the time of writing, as the Layer 2 token climbs despite bearish on-chain metrics.
Also read: Dogecoin price could rally 7% eyes comeback to $0.10 while sentiment among traders remains negative
Optimism on-chain metrics are bearish
Optimism chain’s large wallet transactions valued at $100,000 and higher increased between December 3 and 23, as seen in the chart below. The spike in whale transactions coincides with the Network Realized Profit/Loss spikes. This indicates that large wallet investors are taking profits as OP price rallies.
Profit-taking typically precedes a correction in an asset and OP price could decline in response to whales realizing their gains in large numbers.
 [13.35.38, 24 Dec, 2023]-638390038520755505.png)
Whale transactions and Network Realized Profit/Loss. Source: Santiment
The MVRV Market Value to Realized Value ratio on a 30-day timeframe has climbed to 66.17% as seen in the Santiment chart below. Typically, everytime the MVRV metric hits a local peak, there is a corresponding correction in price and the current level is the highest in the past six months.
It is likely that OP is poised for a correction in the short term.
 [13.37.06, 24 Dec, 2023]-638390038805120006.png)
MVRV Ratio and price. Source: Santiment
Another key on-chain metric, Network Growth reveals a bearish divergence in OP. Despite OP price growth, Network Growth did not increase, it remained well below the average level throughout December.
 [14.04.44, 24 Dec, 2023]-638390039077617210.png)
Network Growth. Source: Santiment
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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Is Altcoin Season here as Bitcoin reaches a new all-time high?
Bitcoin reaches a new all-time high of $98,384 on Thursday, with altcoins following the suit. Reports highlight that the recent surge in altcoins was fueled by the victory of crypto-friendly candidate Donal Trump in the US presidential election.
Shanghai court confirms legal recognition of crypto ownership
A Shanghai court has confirmed that owning digital assets, including Bitcoin, is legal under Chinese law. Judge Sun Jie of the Shanghai Songjiang People’s Court shared this opinion through the WeChat account of the Shanghai High People’s Court.
BTC hits an all-time high above $97,850, inches away from the $100K mark
Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange
Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.
Bitcoin: New high of $100K or correction to $78K?
Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.