The Optimism token remained in a deep bear market as the recent gains of most cryptocurrencies stalled.
Optimism (OP), the leading tier two token, was trading at $1.5140 on October 10, down 70% from its highest level this year.
One reason for the decline in optimism this year is that the chain continues to lose market share in the industry.
In key areas such as decentralized finance, it has been overtaken by layer 1 networks such as Avalanche (AVAX) and Sui (SUI). Popular second-level networks such as Base and Arbitrum also passed it.
Optimism’s total value recorded in the DeFi industry fell to $627 million, down from a year-to-date high of $1.04 billion. Additionally, the volume of stablecoins in its ecosystem fell from a yearly high of $1.35 billion to $1.17 billion.
Moreover, its role in the DEX index industry has diminished, with weekly volume down 24% to $503 million, while Sui and Base volumes jumped 51% and 5%, respectively, over the same period.
The price of OP dropped after the developers introduced the fifth airdrop, unlocking 10 million OP tokens to 54 million.
It now has 500 million OP tokens left for future airdrops, meaning existing holders can expect further dilution.
🔴 Use Superchain and get benefits 🔴
Today @Optimism introduces Airdrop #5:
Together in the chain, together receive benefits.
More than 10 million OPs were distributed to more than 54 thousand unique addresses.
As of today, there are approximately 550 million OP remaining for future distributions. pic.twitter.com/TCS1oSXKBs
— Optimism (@Optimism) October 9, 2024
Most of this dilution will occur because Optimism has 1.25 billion tokens in circulation versus the maximum supply of 4.29 billion. According to Defi Llama, the network unlocked 49.19 million tokens in September, with the final unlock scheduled for 2026.
Meanwhile, the volume of Optimism in the futures market also declined. The data shows futures open interest fell to $104 million on Oct. 10, down from a year-to-date high of $327 million.
Optimism token risks falling further
On the daily chart, the OP token has been in a strong downtrend since peaking at $4.86 in March.
It remained below the 50-day and 100-day exponential moving averages. In addition, the relative strength index, which measures the rate of change, moved lower.
Optimism also formed a bear flag pattern suggesting the possibility of a bearish breakout. If that happens, it could fall and retest support at $1.06, its lowest point in August.
