Down by 80%, is Optimism OP price cheap enough?
Optimism price made a strong recovery on Monday as investors bought the recent dip. OP rose to a high of $0.88, which was about 40% above the lowest level last week. Still, OP price has plunged by more than 80% from its highest level in June.
Optimism ecosystem growth
Optimism is one of the biggest layer-2 networks in the world. It is a blockchain project that was developed to help developers supercharge their Ethereum applications.
Optimism competes with Polygon and other layer 2 networks like Immutable X and Loopring. By using its stack, developers are able to take advantage of its significantly fast speeds and low transaction costs.
Optimism has been used by some of the best-known applications in Ethereum’s network. Some of the most popular apps in its ecosystem are Synthetix, Aave, Perpetual Protocol, Uniswap, Velodrome, and Quix, among others.
Data compiled by DeFi Llama shows that its performance in the DeFi market has held relatively well recently. It has a total value locked (TVL) of more than $1.6 billion, which is much higher than the $307 million it had when the year started.
Aave v3 is the biggest DeFi protocol in Optimism, with a TVL of over $1 billion. It is followed by Velodrome, Curve, and Stargate Finance.
Optimism price is in a recovery mode as investors react to the strong performance of Stargate Finance. Its TVL has risen by more than 60% in the past 30 days to over $47 million. As a result, the STG coin rose by more than 10% in the past 24 hours.
Last week, Optimism announced the launch of OP Stack, a set of modular components ready to assemble into custom chains to fit any use case. The developers hope that more builders will use these tools to build their applications.
Optimism price prediction
The four-hour chart shows that the OP price has been in a recovery mode in the past few days. It managed to move from last week’s low of $0.635 to a high of $0.885.
Optimism rose above the 25-day and 50-day moving averages while the Relative Strength Index (RSI) moved above the overbought level. It has also done a break and retest pattern by retesting the support at $0.778.
Therefore, the coin will likely continue rising as bulls target the next key resistance at $1. A drop below the support at $0.778 will invalidate the bullish view
