Optimism (OP) price wobbled below $1.30 territory after the team announced token issuance worth nearly $180 million. On-chain analysis provides insights into the possible Optimism price movements in the coming days.
This week, the Optimism (OP) team announced an Airdrop of 19 million OP tokens to dedicated community participants and a private token sale of approximately 116 million OP tokens. Here’s how Optimism’s price could react to the $180 million token issuance.
Network Demand Hit Record Numbers as the $180 Millon Token Issuance Sparked Community Interest
At a current market price of $1.32, the 19 million OP tokens airdropped on Monday are worth approximately $25 million. Meanwhile, the 116 million private token sale totals $153 million. This brings the value of the new tokens issued to $178 million.
On-chain data shows that Optimism attracted a record number of new user accounts this week as the community braced for the largesse. On September 15, a few days before the airdrop, Optimism recorded 90,604 new wallet addresses.
On-chain data from Santiment shows the last time Optimism recorded up to 90,000 new users in 24 hours, its mainnet launch date on May 31, 2022.
Network Growth tracks the number of new wallet addresses created daily on a blockchain network. This provides a rough estimate of users that joining the network. Typically, this uptick in Optimism’s user acquisition means that the underlying OP token is attracting fresh demand.
The timing of the Network Growth spike implies that most of the new entrants joined in attempts to participate in the recent $25 million airdrop. If a significant portion of them stick around to perform economically viable transactions, it could have a lasting bullish impact on OP price.
Read More: 9 Best Crypto Demo Accounts For Trading
Airdrop Beneficiaries Opting to HODL Rather Conduct an Instant Sell-Off
Notably, the Optimism team clarified that beneficiaries of the private $178 million OP token sale are subjected to a two-year lockup period. But on a more positive note, 31,000 community participants who benefited from the $25 million OP Airdrop have opted to HODL as well.
Since the Airdrop distribution on September 18, Optimism investors have moved millions of OP tokens off exchanges. As depicted in the IntoTheBlock chart below, OP Exchange Netflows have trended negatively for three consecutive trading days since September 18.
Exchange Netflow evaluates the difference between total exchange deposits and withdrawals. Negative values of Exchange Netflow mean investors have withdrawn more tokens from exchanges into long-term self-custody than deposits made by traders looking to explore short-term profit-taking opportunities.
The chart above illustrates that between the Airdrop on September 18 and September 22, the total amount of OP Exchange Reserves dropped by 5.2 million tokens.
This implies that many Optimism Airdrop beneficiaries are looking to HODL rather than sell off instantly. Combined with the parabolic increase in Network Growth, these bullish indicators will likely see Optimism consolidate around the $1.30 territory in the coming days.
OP Price Prediction: Potential Rebound Toward $1.50
From an on-chain perspective, if Optimism Airdrop beneficiaries continue to HODL, their declining exchange supply could potentially propel OP above $1.50.
The Global In/Out of Money Around Price (GIOM) data, which depicts the purchase price distribution of current Optimism holders, also validates this bullish thesis. It shows that if Optimism scales the initial resistance at $1.34, the bulls could ride the wave toward $1.50.
As shown below, the 96,170 addresses bought 811,710 OP tokens at the average price of $1.48 is the major obstacle that could prevent the bulls from reclaiming $1.50.
But if the new entrants stick around and the OP airdrop beneficiaries keep HOLDing, the bull rally could surpass $1.50.
Conversely, the bears could seize control if the OP price drops below $1. However, as shown below, 94,400 addresses had bought 2.4 billion OP tokens at the minimum price of $1.04. Being the most influential cluster of Optimism holders, they will likely prevent the bearish downswing.
But if the Optimism price fails to hold steady at that vital support level, it could drop below $1.
Read More: Best Upcoming Airdrops in 2023
Trusted
Disclaimer
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. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
