Optimism (OP) Climbs Over 10% On Weekly Chart, Will The Rally Last?

Following a slight improvement in the broader cryptocurrency market, Optimism (OP) has posted positive gains today, August 2. The token is now over 10% higher than seven days ago. Optimism’s gain has placed it among the top-gaining coins today, with a nearly 3% gain in the last 24 hours. 

According to CoinMarketCap data, Optimism peaked at $1.6712 on Wednesday morning, an over 5% increase from its past-day price. However, due to the intense struggle between the buyers and sellers, OP has receded from the day peak and is now traded at $1.63, with a 3.08% price increase.

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Optimism maintained a fairly bullish momentum from July 13 to August 2, reflected in its over 22% 30-day price increase. While the uncertainty about its next price action remains high, speculations suggest the following developments might influence the OP’s market outlook in the coming days.

Coinbase’s newly launched BASE network built on the Optimism Stack reportedly witnessed a backdoor contract exploit, leading to the loss of 597 Ether worth approximately $1 million. 

According to on-chain investigations, the exploiters infiltrated a BASE Chain’s backdoor contract, continuously minted tokens, and sold them for profit. Data shows that the perpetrator address already minted 40 different tokens, generating approximately 597 Ether in profit, which has been moved out.

Speculations are that the exploit might impact all protocols linked to it, including the Optimism network, since BASE anchors the OP Stack. Also, the BASE hype attracted several new crypto addresses to the Optimism network. The recent hack may depress investor sentiment, potentially impacting OP’s price.

The number of active addresses on the Optimism network grew significantly over the last few months after BASE’s launch in late February. However, this growth could be stalled due to the unfortunate event on the BASE network.

The OP/USD daily chart demonstrates OP’s bullish momentum as the bulls fight to secure higher market positions for the coin. OP has surpassed its two critical support levels, and the bulls show no sign of stopping, evident in the short green candlesticks formed above the $1.631 support level.

The Moving Average Convergence/Divergence is above the signal line with green histogram bars that reflect the asset’s bullish momentum. In addition, the RSI has crossed the overbought region and now sits at 75, demonstrating increased buying pressure on OP. 

However, a bearish trend reversal is possible since the buyers have reached saturation and may recede due to a decline in momentum. 

As of the time of writing, OP trades at $1.63. But the next few hours are critical as the price could decline to $1.61 if the bears reclaim control.