Optimism (OP) has experienced remarkable gains today, on October 2nd. The trading price is $1.45, with a 5% increase in the past 24 hours. Furthermore, the price has risen by 15% in the past seven days.
The rise of OP coincides with the overall improvement in the cryptocurrency market, which has shown a notable recovery. However, it remains to be seen whether OP will sustain the ongoing rally. A closer look at some technical indicators, however, could provide important insights into the next price movements.
OP is approaching the overbought zone as buyers continue the rally. The positive price dynamics of OP continue as buyers dominate the market. Additionally, on the daily chart, the fifth candle in a row has formed, confirming active accumulation by traders. Its rally became apparent on September 29th when it broke through the middle band of the Donchian Channel (DC).
Today, OP has reversed the resistance level of $1.41 to support and is approaching the upper band of the Donchian Channel towards the resistance level of $2.50. If buyers continue the rally beyond the $1.50 resistance, OP is likely to enter the overbought zone.
Furthermore, the Moving Average Convergence/Divergence (MACD) has crossed above its signal line, indicating a strong buy signal. Additionally, the histogram bars are green, confirming that buyers are still active. Moreover, the Relative Strength Index (RSI) shows a value of 64.2 and is rising towards the overbought range of 70.
Based on these indicators, OP is likely to enter the overbought range in the coming days, indicating that accumulation will continue. However, traders should pay attention to bearish resistance at the $1.50 mark, which could serve as a potential entry point for sellers.
The current price of OP in the daily chart is $1.453.
What could be behind the recent gains of OP?
In addition to the overall recovery of the cryptocurrency market, Optimism is experiencing exciting developments within its ecosystem. One notable change is a proposal on September 29, 2023, to change the security model of Optimism.
According to the proposal, the OP team aims to hand over the admin key for the OP Mainnet to public and decentralized participants. These participants will be responsible for the security council governing Optimism.
Although this proposal is awaiting approval, it creates engagement within the OP ecosystem, thus increasing investor interest and activity. And this increased activity puts upward pressure on the token.
Furthermore, the Optimism Superchain is another innovation driving the growth of the ecosystem. According to blockchain data provider Covalent, the Superchain is an interconnected blockchain network of individual chains called “OP chains.”
Interestingly, builders can use the Superchain to participate in on-chain development. However, they must adhere to the Chains’ Law, a set of community rules regarding how teams support public goods and decentralization.
The OP Mainnet is the first member of the Superchain. Again, more active addresses were recorded daily, surpassing those of Arbitrum, whose on-chain activity is declining.
BuildOnBase, created by Coinbase, is the second member of the Superchain and aims to attract billions of users. BuildOnBase has been classified as one of the most powerful chains in 2023 and the fastest to reach L2 status, with 100,000 users in 56 days.
These developments are likely to drive the growth of the Optimism ecosystem, as evidenced by its recent price increase.
