Optimism adds 98% in a week – Is the rally driven by fundamentals?
Optimism token has surged by almost 100% in one week
Positive developments in July have been boosting the token
Investors should buy on a retracement
Investor interest is back on Ethereum Layer-2 scaling solution Optimism. Over the past one week, the token has gained more than 98%. That, of course, underlines the gains other Ethereum-based tokens have been experiencing. Cryptocurrencies such as Ethereum Classic have also been top gainers. Nonetheless, a further scrutiny of Optimism reveals underlying fundamentals driving the surge.
On July 26, Optimism announced the launch of Drippie. Drippie is a trust-minimized conditional transaction system of Ethereum. It will let users conduct transactions following set conditions. Optimism expects the system to solve automation issues that will increase the performance of the blockchain.
The integration follows another positive development on July 24. Curve Finance had announced a grant proposal that would raise liquidity on Optimism. The move is expected to allow one million Optimism tokens to be distributed on the Curve pool. Liquidity providers will be incentivized with the OP tokens.
OP token has been getting boosts from the July developments. But to an investor, is the token now attractive or a bubble burst is about to happen?
Optimism trades at a high level but faces immediate resistance
Source – TradingView
While the recent developments are positive for OP, the current price could be unsustainable. The RSI points to overbought conditions, and a correction is more probable. We recommend investors buy on a retracement. The token could potentially slide to $1.45 as it already faces resistance at $1.88.
Concluding thoughts
The latest developments increase the utility of the Optimism token. At the current valuation, investors should consider buying lower as corrections are more imminent. The potential support zone is at $1.45.
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