Optimism (OP) Under Pressure in 2024: Price Outlook

Optimism (OP) has had a tough year, reflecting broader challenges in the scaling solutions space. The entire ecosystem, which includes leading projects like Arbitrum, Polygon, and Mantle, is facing significant price declines. OP, in particular, has dropped sharply, losing around 62.74% of its value. 

This drop reflects growing uncertainty about the long-term viability of scaling solutions, which were once seen as crucial for Ethereum’s future. Mantle, a rising competitor, has closed the market cap gap with Optimism, reducing the difference to just $400 million. This shift in momentum has raised concerns about Optimism’s future. 

Decline of Scaling Solutions in 2024 

The following table outlines the price performance of the four major scaling solution coins in 2024: 

The excitement that surrounded these solutions due to Ethereum’s high gas fees and slow transaction times has faded. Investors are now questioning whether these projects will remain the answer to blockchain scalability problems. 

Is OP Oversold? 

The Relative Strength Index (RSI) of OP has dropped to 27.99, which indicates that the token is oversold. The RSI is a key momentum indicator used by traders. A reading below 30 often suggests that an asset is oversold, while a reading above 70 means it is overbought. 

Just a few days ago, on September 28, OP’s RSI was 75, indicating it was overbought. This sharp decline to 27.99 in such a short time shows a dramatic shift in market sentiment. This significant drop might indicate a potential buying opportunity for investors who believe OP is undervalued. 

Price Prediction and Key Levels 

A bearish signal has formed in the chart, called a “death cross.” This happens when the short-term Exponential Moving Average (EMA) crosses below the long-term EMA. A death cross often suggests a downtrend ahead. If this pattern continues, OP’s price could fall to key support levels of $1.41 and $1.29. If the price breaks below these levels, it could drop further to $1.06, representing a 30% decline. 

However, there’s also a chance that the market could rebound. If the death cross turns out to be a false signal, OP could recover and reach $1.63. If that resistance is broken, the price could rise to $1.81, which would mean a 21% gain. 

Optimism (OP) faces significant challenges this year, but its low RSI and potential support levels might offer a buying opportunity for those betting on a recovery. Investors should watch the key support and resistance zones to gauge future price action.