Optimism Token Drops 26% Despite Increased Ethereum Activity

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The Essentials at a Glance

The cryptocurrency Optimism (OP), an Ethereum Layer 2 (L2) project token, has recorded significant losses in the past week. Despite an increase in user activity after the Ethereum Dencun upgrade, the price of OP fell by 26.29% to $3.42. This development raises questions about whether the selling phase for OP is finally over or whether further price declines are to be expected.

A Look at the Current Situation

Following the recent Ethereum Dencun upgrade, which promised lower gas fees for L2 users, Optimism saw a surge in daily active addresses to 114,200 on March 15. This suggests a growing interest in the OP token. However, this was not reflected in the price, which continued to fall. Historically, this was not the first time a divergence between the price of OP and active addresses was observed.

Revenue and Price Development

Despite high user activity, Optimism’s revenue has fallen by 60.7% in the last seven days. This decline in revenue suggests that the fees, which had risen shortly after the Dencun upgrade, quickly fell again. However, a 222% increase in revenue was observed in the last 24 hours, which could indicate a possible recovery of the OP price.

Forecast for OP

The analysis of the divergence between price and daily active addresses (DAA) provides clues as to whether a buying or selling signal is to be expected. Currently, the development shows that a strong buy signal for OP is lacking, indicating a possible continuation of the downtrend. If the price of OP continues to fall, this could suggest that the Ethereum upgrade was merely a “sell the news” event for L2 tokens.

Our Assessment

Although the short-term outlook for OP appears challenging due to recent price drops and uncertain market conditions, the long-term potential of Optimism and other L2 tokens could be positive. This is heavily dependent on the overall development of the Ethereum price and its impact on L2 tokens. Investors should closely monitor market developments and prepare for further fluctuations.

Sources

  • Artemis
  • Token Terminal
  • Santiment
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Profile Ethereum
Symbol ETH
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