Optimism price fails to pick up on whales’ bullishness as short-term traders gain dominance

• Optimism price has been in a downtrend since the beginning of August, with no recovery noted recently.
• Whale addresses in the same duration have seen a significant increase in their OP holdings.
• The short-term traders have also risen in terms of concentration, making the altcoin vulnerable to minimal growth.

Optimism price, unlike the rest of the market, did not note any recovery in the past couple of days and has instead been stuck in a downtrend for August and September. Interestingly, this price action did not induce any bearishness in the investors’ behavior but did make it slightly difficult to note a recovery.

Optimism price holds a bearish stance

Optimism price trading at $1.28 at the time of writing has been stuck under the 50-, 100- and 200-day Exponential Moving Averages (EMA) for nearly the entire September. At the moment, the 50-day EMA is in confluence with the resistance level of $1.36, suggesting that it might be difficult for OP to break this bearish stance.

This makes OP more likely to continue its drop since the Relative Strength Index (RSI) is also below the neutral line of 50.0. In such a case, a drawdown to $1.06 is not too far-fetched. However, losing this support level might prove to be rather devastating for the altcoin investors.

OP/USD 1-day chart

Nevertheless, a bounce back could lead to a recovery in Optimism price, potentially even pushing the altcoin to breach the aforementioned resistance levels. Should OP flip $1.3 into a support floor, the bearish thesis would be invalidated. 

Whales bank on the low prices

Optimism whales have been making the most of the current market conditions, stacking up OP for the past two months. The addresses holding between 10,000 OP and 10 million OP have observed an increase of 150 million OP between August 1 and the time of writing. Up from 546 million OP, the addresses collectively hold about 696 million OP presently, which is a sizeable accumulation.

Optimism whale holdings

These whales are bound to make some significant profits once the price rises beyond $1.36. But another challenge for Optimism price before it can make the rise is the increase of short-term traders. 

Between September and October, short-term traders (those who hold assets for less than a month) have seen an 8% increase in their domination among OP holders. Usually, the increase in this investor type is not the best thing for an altcoin since it makes the asset vulnerable to a price decline caused by sudden selling. 

Since presently, short-term traders amount for 21% of all the OP holders, it does make Optimism price susceptible to an unprecedented swing.

Optimism investor distribution

Thus, investors looking to jump in like the whales to make profits off the low prices are advised to watch out for the short-term traders' behavior.

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