Crypto market analyst Ali once again highlighted Optimism (OP), Ethereum’s second layer scaling solution, predicting bullish sentiment on the token.
Ali says the OP is capturing a set of chart patterns historically associated with a potential rally. This is what he experienced in previous cycles.
In his analysis, he focuses on the OP’s tendency to form bullish ascending triangles at market bottoms. Once confirmed, you can keep an eye on what are often significant price increases.
#Optimism $OP has a history of forming market bottoms in the form of ascending triangles, often followed by a rally to the 1.618 Fibonacci retracement level. Today we see a similar situation, indicating a bullish target of $7.20 for #OP – a potential gain of 340%. pic.twitter.com/4ingaFv4d3
— Ali (@ali_charts) November 11, 2024
According to Ali, OP is now establishing another ascending triangle pattern. This will certainly be preceded by a trend reversal and a breakthrough in technical analysis.
Ali believes OP could rise to a very bullish $7.20 level on this basis. It is also at the 1.618 Fibonacci retracement level, a hot spot often seen on technical charts.
If OP can get that far, that could equate to a 340% gain. This can also attract traders and investors.
Optimism fell by more than 10% in a day
Although the long-term outlook is optimistic, OP has begun to fall sharply and rapidly. He lost more than 10% in a day. Currently trading at around $1.59, its price has fallen sharply from recent highs.
This has hurt market sentiment and OP’s market capitalization and trading volume are falling. The current market capitalization is around $2 billion and the 24-hour trading volume is around $671.25 million.
The sell-off is a broader market correction, but Ali believes the decline could signal an OP bottom rather than a negative indicator.
Ali notes that the formation of an ascending triangle often leads to these pullbacks as the pattern approaches support before breaking out.
In this case, now the OP price movement around the lower border of the triangle may be favorable for buying in hopes of a rally.
Arguments in favor of the rally: technical analysis
Historically, OP technical indicators have signaled that a big price move is coming as they follow the pattern of Fibonacci retracement levels.
OP had previous exit cycles from this setup and needed to test the 1.618 Fibonacci extension after that.
Ali’s chart once again confirms this trend. OP rose after consolidating in ascending triangles and moving towards predetermined key Fibonacci resistance levels.
The accompanying chart shows multiple instances of optimism in similar patterns at or near the 1.618 Fibonacci level.
These historical patterns show that Ali’s prediction that OP could reach $7.20 is correct. After the token formed and exited the ascending triangles, it also reached these levels.
In technical analysis, the 1.618 Fibonacci extension tends to provide some resistance, making it a very realistic profit-taking target for traders and investors who are looking for it as a potential profit target.
This can be seen from the latest series of red candlestick patterns as price breaks below the rising channel.
On the other hand, at 21.41, the ADX value indicates that the OP is in a low trend strength phase; the asset is consolidated.
If the OP breaks and momentum strengthens, then ADX will move higher, which will indicate momentum is strengthening, confirming the validity of the ascending triangle and suggesting a strong uptrend.
