Optimism price analysis: key levels to watch as OP forms classic reversal pattern

Optimism (OP) displays significant bearishness after losing 25% and nearly 50% in the past week and month.

Furthermore, the charts show OP has formed a head-and-shoulder formation, hinting at impending downward continuation.

OP forms a head-and-shoulders pattern

Optimism’s price performance demonstrates bear dominance, and the emerging head-and-shoulders formation affirms this narrative.

The head forms a visible peak as the shoulders appear symmetrical.

OP trades at the crucial support barrier of $1.12.

Breaching this foothold could catalyze significant dips for the altcoin.

Optimism will likely test the $1.06 mark or even lower price regions.

The distance from the head’s peak to the neckline sets OP’s bearish target at $0.5.

That would mean an approximately 55% slump from the current price.

Technical and on-chain signals indicate weakness

Further analysis adds to Optimism’s bearish trajectory.

The Chaikin Money Flow hovers at the negative territory (-0.08) after plunging from +0.36 in the past 72 hours.

That confirms reduced cash entering the OP ecosystem, reflecting investor distrust in the altcoin’s near-term performance.

The 1D Moving Average Convergence Divergence’s bearish crossover with the signal line confirms the notable selling pressure.

IntoTheBlock’s data magnifies OP’s bearish picture, with all on-chain signals highlighting a downbeat mode.

Firstly, over 91% of OP investors are experiencing losses at current prices of $1.12.

This might intensify selling activities amid continued price dips.

Altcoin will hardly attract new buyers, considering its dwindled profitability.

The 0.87% decline in net network growth highlights reduced network activity and faded interest from new users.

Concentration declined by 0.80%, confirming weakness and notable challenges in flipping the pessimistic on-chain data.

Further, the 2.49% slide in large transactions indicates reduced interactions by whale entities.

OP’s current price action

Optimism trades at $1.12 after gaining 1.54% in the past 24 hours.

Despite the minor surges, the notable decline in daily trading volume suggests a weak uptrend.

Bulls should hold the reliable support floor at $1.12 to prevent further price dips.

However, all technical, sentiment, and on-chain signals highlight significant downward risks for OP.

The head-and-shoulders formation, reduced cash flows, faded profitability, and bearish on-chain signals point to potential price slumps in the near term.

Nevertheless, broad market movements remain crucial for Optimism’s trajectory in the upcoming sessions.

Cryptocurrencies displayed volatility today amid tariff-triggered economic uncertainties.

Meanwhile, experts remain confident about the market, perceiving the ongoing declines as dip-buying opportunities.

According to Eric Trump, Bitcoin presents a perfect entry-level at current prices.

Sudden bullish rallies in the broad market will mean substantial gains in the overall crypto landscape.

That could see Optimism invalidating the head-and-shoulders bearish setup before exploding to the upside.

Analyst Solberg Invest highlighted a potential surge to $7 for Optimism.

That would mean an over 480% upswing from current levels.

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