Optimism price tilted upwards on Wednesday as cryptocurrencies staged a slow recovery. OP jumped to a high of $1.05, which was about 65% from the lowest level in November. This price is about 55% below the highest point in August. So, what next for OP in the coming months?
What is Optimism?
Optimism is a leading blockchain project in the layer-2 industry. It is a rival to Polygon and other layer 2 networks like Arbitrum and Loopring. The network makes it possible for developers to supercharge their applications and make them faster and cost-efficient.
Optimism has been used by some of the best-known projects in the crypto universe. Examples of apps in its ecosystem are AAVE, Synthetix, Velodrome, Curve, and Uniswap. Others are Sonne Finance, Beefy, Stargate, and Perpetual Protocol.
According to DeFi Llama, Optimism has a total value locked of about $600 million, making it one of the biggest platforms. At its peak, Optimism had a TVL of more than $28 billion.
Like other cryptocurrencies, Optimism price had a difficult performance in 2022 as the industry battled numerous challenges. For example, it battled the collapse of FTX and other leading players like Voyager Digital and Celsius. It also reacted to the overall outflows from the crypto industry.
Will Optimism price recover in 2023?
Optimism price action will depend on several factors in 2023. First, it will depend on the Federal Reserve. Signs of a Fed pivot will be bullish for cryptocurrencies and stocks. Historically, crypto and other assets tend to do well in a period when the Fed is lowering interest rates. There are signs that the bank will start lowering rates or stop hike rates since inflation has started to ease.
Second, OP price will react to its ecosystem growth. Ecosystem growth will lead to more activity in the network, which will push its price higher.
Finally, regulations will play a part. Analysts expect that regulators will tighten crypto rules in a bid to avoid major blow ups in the future.
The four-hour chart shows that OP price has been in a tight range in the past few days. It moved above the 25-day moving average while oscillators continued rising. Therefore, the coin will likely continue rising in the near term. A drop below the support ay $0.85 will invalidate the bullish view.
