The Optimism (OP) price reached a new all-time high on Feb. 3. Whether it moves above the $3.22 resistance area can determine the future trend’s direction.
The Optimism price has exploded in 2023, increasing by 255%. This led to a new all-time high price of $3.13 on Feb. 3. The high was made at exactly the 1.61 Fib retracement of the previous drop.
Since Fib extensions are used as resistance/support whenever the price reaches a new all-time high, whether OP manages to break out above it or gets rejected could determine the future trend.
In case of a breakout, the next resistance would be at $4.83, the 2.61 Fib extension. However, if the rally loses steam, the Optimism price could fall to the horizontal support level of $2. The area previously acted as resistance before turning to support on Jan. 25.
While the daily RSI generated bearish divergence (green line), it seems to have broken out from the bearish divergence trend line.
Therefore, the technical analysis from the daily time frame does not offer a decisive verdict on whether the OP price will break out or continue falling.
Optimism Price Prediction for Feb: Local Top Might Be in
The technical analysis from the short-term 12-hour time frame suggests that a local top could have been reached. There are two reasons for this.
First, the OP token price is likely in the fifth and final wave of an upward movement. The presence of the symmetrical triangle indicates that the previous correction was wave four.
Wave five had 0.618 times the length of waves one and three combined. The fact that this Fib level coincides with the previously outlined 1.61 Fib extension supports the possibility of a top.
However, if wave five extends, it could increase to $3.91. Since there is no other Fib resistance at this level, this is less likely.
However, it is worth mentioning that the entire increase is likely part of a long-term wave three (white). As a result, another upward movement toward a new all-time high is likely after the correction.
To conclude, the most likely OP price prediction for Feb. is a drop toward $2 before the upward movement continues to a new all-time high. An increase above $3.22 would invalidate this short-term Optimism forecast and could lead to an extension toward $3.91.
For BeInCrypto’s latest crypto market analysis, click here.
In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.