Can Optimism hold above the $1.46 support?

• OP finally crossed the $1.43 resistance, indicating a potential to move toward $2.
• There could be an entry around $1.53 if the price-DAA maintains the same momentum.

Optimism [OP] lived up to its name, gaining 7.65% in the last 24 hours. The jump followed the rise of most assets in the crypto market, led by Bitcoin [BTC]. But before the rise, analyst and investor Crypto Tony, spoke about the potential of OP.

Read Optimism’s [OP] Price Prediction 2023-2024

OP flips the target

In his post on X (formerly Twitter), Tony applauded OP for blasting through a resistance. A closer look at the charts by AMBCrypto revealed that the resistance being talked about was at $1.43. 

$OP / $USD – Update

Nice push against the resistance zone here, i am looking to long if we can flip $1.46 into support and stay above pic.twitter.com/6NmJvenAc7

— Crypto Tony (@CryptoTony__) November 4, 2023

The analyst did not just focus on the resistance. Instead, he mentioned opening a long OP position if it flips the $1.46 was the right thing to do. In quick summary, a long in crypto implies that a trader buys an asset while expecting a rise in its price.

If the asset price increases, the trader can sell it at a profit. The opposite of this is short. So, instead of anticipating a price increase, traders profit when the asset price falls.

Interestingly, OP’s price was changing hands at $1.53 at press time, meaning traders who may have longed for the cryptocurrency would have most likely made a profit.

Similarly, there is a high chance that there are traders that have targets far higher than $1.53. Consequently, AMBCrypto believes combining on-chain data and the technical outlook may be more beneficial than using only one aspect to determine the direction.

Longs can enter

As such, it was necessary to check out the price-Daily Active Addresses (DAA) metric. From Santiment’s data, Optimism’s price-DAA divergence has been increasing. This is a sign of an increase in the overall usage of the Optimism network.

Source: Santiment

However, the OP price grew more than the DAA, indicating a possible entry for traders looking to long the token. If the price had declined and the DAA surged, then it is an indicator that it is time to sell or short the token.

Analysis from AMBCrypto showed that OP has the potential to move towards $2. This assertion was because of the momentum displayed by the Accumulation/Distribution (A/D). At press time, the A/D line was increasing.

Is your portfolio green? Check out the OP Profit Calculator

The increase indicates that there was enough volume available to back the OP price action. Therefore, a bullish movement may not be invalidated soon. The Relative Strength Index (RSI) also signals that buying momentum was at its peak.

However, the RSI at 70.11 meant that OP was overbought at press time. Thus, a downward movement may occur before a pump. Also, a retest of $1.43 may be possible before OP tries to approach $2.

Source: TradingView