Disclaimer: This is not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results.

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Overview

Optimism ($OP) has consistently presented strong trading setups, and it's one of those assets that I've closely followed over the years. Back in Q4 2023, I (Kushal) captured a great opportunity when $OP found support from a key demand zone it had established earlier that year. At the time, $OP had pulled back and showed strength while consolidating, making it an ideal swing trade setup.

Now, in 2024, we're seeing a similar structure emerge. $OP continues to exhibit a prolonged bullish trend with clear higher highs and retracements into key demand zones. As of now, $OP is trading within the crucial demand zone between $1.14 - $1.46, an area that previously marked a strong accumulation base. Given the current bullish market sentiment, it appears that we could be approaching another significant upward move.

Weekly timeframe analysis

On the weekly chart, $OP has consistently maintained a bullish structure since its launch, with higher highs followed by retracements into key demand zones before continuing its upward trajectory. This pattern reflects the coin's ability to build strong bases of support, propelling its next moves higher.

Right now, $OP is trading at $1.55 trading, just above its demand zone, ranging from $1.14 to $1.46, an area that has historically provided a solid foundation for upward movement. This current zone is critical as it aligns with a demand area created back in September/October 2023 (marked by the orange circle).

Coincidentally, this was around the time when I initially took longs on $OP because I recognized it taking support from an earlier demand zone created in December 2022 (marked by the purple circle). This repeat of history shows how $OP has been moving within a well-defined structure, constantly using these demand zones to reset, accumulate, and push higher.

By sticking to this well-established higher-high and higher-low pattern, $OP's price action reflects market support, keeping it well-positioned in this prolonged bullish cycle.

Key observations

• Demand zone: $1.14 - $1.46 remains a crucial accumulation area.
• Support strength: If the price continues to hold in this area, we could see a solid move upward.
• Potential risks: A break below $1.14 could lead to further downside, with the next key support area around $0.95.

Daily timeframe analysis

On the daily chart, we've seen some significant developments with $OP recently. Back in mid-July, $OP broke out from a persistent downtrend that had been in place ever since the all-time high (ATH) of $4.86 back in March 2024.

The breakout wasn't just a quick run either; it gave a solid retest to the trendline in early August, which, in my experience, adds serious confluence to the setup.

Right now, $OP is facing some resistance from a supply zone that's marked between $1.98 - $1.81, and this is where things get interesting. Not only is the price fighting this zone, but we've got the 200 EMA sitting right around $1.93, too. That makes this zone a critical level to watch. In my opinion, flipping this zone and turning it into support is essential if $OP is going to shift fully bullish and make those bigger moves we're anticipating.

If $OP manages to break above and hold, the next immediate resistance is sitting at $2.31. And if we flip that, we're likely talking about a move to $3+ in the medium term. Those are the targets we'd be eyeing for swing opportunities.

On the downside, the weekly demand zone between $1.14 - $1.46 remains our strong support level. If we do see a retracement or failure to break the current resistance, this demand zone should act as a solid area for accumulation. For me, the confluence of the 200 EMA and the supply zone makes this a very key area to watch. If we flip it, I wouldn't be surprised to see some decent swing setups in the near future.

Cryptonary's take

The price action for $OP is shaping up similarly to the setups we saw in late 2023. The current retracement to a critical demand zone, along with the wider market becoming bullish, offers a potentially strong upside for $OP. Flipping key resistance levels will be crucial for confirming this bullish thesis, but the setup looks promising for possible swing opportunities in the medium term.