- The analyst explained how support and resistance can play a role in OP’s hike to $2.
- The Stochastic RSI indicates that it could be time to sell OP as a correction to $1.60 could be impending.
- Buyers are still in control of the market but if the 50 EMA flips the 20 EMA, the tides can change.
The rise of Optimism (OP) in the last seven days may have brewed confidence in market participants considering a recent opinion by a crypto analyst. Altcoin Sherpa, the analyst in question, shared his short-term prediction for OP with his 196,300 followers.
According to Altcoin Sherpa, OP is one of the stronger altcoins. Furthermore, he opined that he planned on selling for around $2 while conceding that the price could drop lower than $.1.73 before the uptrend.
One reason why the analyst was convinced that OP’s price would increase could be linked to the token’s recent performance. Over the last seven days, OP increased by 17%, making it one of the best performers out of the top 50 assets in the market.
An Optimistic Look Into the Market
But Altcoin Sherpa also considered the technical outlook for his projection. From the chart shared above, Altcoin Sherpa noted that the 200-day Exponential Moving Average (EMA) has the tendency to flip the support and resistance level around $1.64 and $1.67.
If OP moves at a higher level of support such as the 200 EMA, then it could indicate that the price could move from a downtrend to an uptrend.
According to the OP/USD 4-hour chart, the support level increased from $1.50 on July 30 to $1.65 on August 3. Consequently, this has resulted in the formation of a bullish market structure. Till the time of writing, demand had outweighed the short/sell attempt close to $1.73.
Time to Sell?
Furthermore, the Stochastic RSI had risen highly but it did not reach the overbought level at 80. However, the indicator also showed that the %K line (white) was 60.38 while the %D line (orange) was 74.04.
Typically, if the %K crosses above the %D line, it is a buy signal. But in OP’s case, the %K crossed below the %D line. Therefore, this indicates that it could be time to sell OP in the short term.
But for OP to conform to a downtrend, the 50 EMA (yellow) needs to cross above the 20 EMA (blue). At the time of writing, the 20 EMA was above the 50 EMA. So, buyers still had control of the market.
If the EMA stance flips to the opposite, then the current bullish structure may tilt toward the bearish area.
In its current state, OP could retrace mildly to $1.60 as buying pressure may subside. However, it is likely that another uptrend emerges moments after the correction.
Disclaimer: The views, opinions, and information shared in this price prediction are published in good faith. Readers must do their research and due diligence. Any action taken by the reader is strictly at their own risk. Coin Edition and its affiliates will not be liable for direct or indirect damage or loss.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
