- Optimism price is up 94% in a week and could face a buy the rumor sell the fact event.
- OP could drop 25% as 24.16 million tokens worth $81.90 million are due to flood markets on December 30.
- A break and close above $4.500 level would create a higher high, likely invalidating the bearish thesis.
Optimism (OP) price is trading with a bullish bias, pumping hard to become the biggest gainer among Layer 2 (L2) tokens. With a trading volume drop of 60%, its biggest contender in the sector, Arbitrum (ARB), is up 10% while OP boasts an outstanding 120% surge in trading activity, pointing to strong interest in the asset.
Optimism network to unlock 24.16 million OP tokens
The Optimism network has a cliff token unlocks event scheduled for December 30, where 24.16 million OP tokens worth $81.90 million will flood the markets. The tokens will be allocated to investors and core contributors, with the former likely to cash in for a quick profit.
OP token cliff unlocks schedule
Optimism price could drop 25%
Optimism price has recorded massive volatility around the unlocks event, rising 94% in a week and almost 25% in the last day. This is likely in the execution of the buy-the-rumor narrative, which means a sell-the-news outcome could be underway.
If profit booking kicks off, Optimism price could lose all the ground covered, flipping the $3.219 support into a resistance. In the dire case, the price could slip below the $3.000 psychological level, to test the supply zone that stretches between $2.601 and $2.710. A break and close below the midline of this order block at $2.653 would not only confirm the continuation of the downtrend but also invalidate the prevailing bullish outlook.
The Relative Strength Index (RSI) is above the 70 level, showing that OP is massively overbought, and a correction could follow in the aftermath of buyer exhaustion.
OP/USDT 1-day chart
On-chain metric to support bearish thesis for Optimism price
Several metrics from the behavior analysis tool Santiment support the bearish postulation. For starters, the Market Value to Realized Value (MVRV) metric is at a multi-month peak at 76.84% indicated in the chart below. In most instances, whenever the MVRV metric hits a local peak, there is a corresponding correction in price, and given the last time this metric was this high was six months ago, a correction may be near sight.
Similarly, the whale activity for large holders with transactions surpassing $100,000 and $1 million also increased, with the surge coinciding with the Network Realized Profit/Loss spikes. This is evidence of possible profit-taking amid ongoing rally.
OP Santiment: MVRV ratio, whale transactions, Network Realized Profit/Loss
Conversely, increased buying pressure above current levels could see Optimism price extend north, clearing the range high at $4.183. In a highly bullish case, the gains could see OP token test the $4.500 level, marking a new higher high and invalidating the bearish thesis in the process.
The northbound orientation of the RSI shows there is still some upside potential for Optimism price. This is accentuated by the large volumes of green histogram bars of the Awesome Oscillator in the positive territory.