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- Amid the recent altcoin bullish breakout, Optimism (OP) gained nearly 140 percent last December to reach an ATH at around $4.13.
- The Optimism network plays a crucial role in enabling the Ethereum network to scale securely, thus onboarding more web3 developers to the largest smart contract ecosystem.
Optimism (OP) network, an Ethereum-based layer two scaling solution that uses optimistic rollups, has continued to make notable waves in the web3 industry. With Ethereum co-founder emphasizing the importance of secure and scalable layer two scaling solution, Optimism has grown to the second biggest L2 on the Ether network with a $887 million in Total Value Locked (TVL) and more than $621 million in stablecoins market cap.
Some of the top decentralized financial (DeFi) applications using the Optimism network include Synthetics with nearly $300 million locked, AAVE V3, Uniswap V3, Velodrome, Stargate cross-chain protocol, and Sonne Finance, among many others.
The notable Optimism growth is, however, facing notable competition from other Ethereum-based layer two solutions like Arbitrum (ARB), and Polygon (MATIC). According to on-chain data provided by Defillama, the Arbitrum network has about $2.46 billion in TVL and nearly $2 billion in the stablecoins market cap.
The Polygon network, on the other hand, has a TVL of about $857 million and a stablecoins valuation of around $1.26 billion. Meanwhile, Optimism is working on maintaining its bullish traction, whereby it recently announced the migration of its OP testnets from OP Goerli to OP Sepolia.
Closer Look at Optimism Price Analysis
The mid-cap altcoin with a market cap of about $3.14 billion has been making higher highs and higher lows since its official launch in early 2022, thus signaling a macro bullish outlook. Since the beginning of last December, OP’s price has gained about 140 percent to reach a new all-time high of around $4.13.
However, OP price has been consolidating in the past two weeks in a range between $4.13 and $3, as speculations on the spot Bitcoin ETF escalates the crypto volatility. Notably, OP bulls must defend the current consolidation range as a support level to secure continued bullish sentiments in the near term.
Otherwise, the recent OP breakout to ATH could end up as a bull trap if the price corrects below $2 in the coming weeks. Moreover, the first time OP price rallied above $2.2 earlier last year resulted in a multi-week correction that ended in October. Nonetheless, the OP bulls are in control with the weekly Relative Strength Index (RSI) having sustained above the 70 level for the second time since its launch.
OP’s Market Outlook
The notable growth for the OP token in the past few weeks is directly attributed to the significant demand for Ethereum web3 products. With the ongoing mass adoption of digital assets and web3 protocols around the world, OP is expected to continue attracting more investors.
As of this report, OP token has about 1 million holders who have facilitated more than 40 million transfers. Trading around $3.45 at the time of this report, OP had a fully diluted market valuation of about $14.8 billion and a 24-hour trading volume of approximately $725 million.
Having recently hit a fresh all-time high, OP price is likely to continue in a parabolic rally in the coming months fueled by institutional investors.
