Optimism token has been struggling in the market recently, facing a bearish trend as the overall cryptocurrency market rally has slowed down. The price of Optimism (OP) has dropped to $1.5140 on Oct. 10, which is a significant 70% decrease from its peak earlier this year.
One of the reasons for Optimism’s decline is the loss of market share to other layer-1 and layer-2 networks like Avalanche (AVAX), Sui (SUI), Base, and Arbitrum. In the decentralized finance sector, Optimism’s total value locked has decreased to $627 million from its high of $1.04 billion, and the stablecoin volume has also dropped to $1.17 billion from $1.35 billion.
Moreover, Optimism’s role in the DEX industry has diminished, with a 24% decrease in weekly volume to $503 million. In comparison, Sui and Base have seen an increase in their volume during the same period. The recent introduction of the fifth airdrop by developers, unlocking 10 million OP tokens to 54 million, has also contributed to the price decline.
The circulating supply of Optimism is 1.25 billion tokens with a maximum supply of 4.29 billion, leading to further dilution for existing holders. The network unlocked 49.19 million tokens in September, with more unlocks scheduled until 2026. Additionally, the volume of Optimism in the futures market has decreased to $104 million from the high of $327 million.
Looking at the technical indicators, the OP token has been on a downward trend since reaching $4.86 in March. It has been trading below the 50-day and 100-day Exponential Moving Averages, and the Relative Strength Index is showing a downward trend as well. The formation of a bearish flag pattern indicates the possibility of a bearish breakout, which could lead to a retest of the support level at $1.06, the lowest point in August.
Overall, the outlook for Optimism token remains bearish, with various factors contributing to its decline in the market. Traders and investors should keep a close eye on the price action and key support levels to assess the future direction of OP token.
