Try Quests to earn SOLA Surge of Optimism
Introduction
- In this Analysis, You will read about OP Token Price in the last couple of weeks. As you may know, The price of Optimism (OP) fell sharply in early November, dropping from highs above $1.30 on November 6 to as low as $0.79 on November 9. In the weeks since, prices have risen, with OP hitting $1.19 on December 14.
- So, I Examined the network and diagnosed some of the possible reasons for the sudden drop and slow climb of OP price in recent weeks. We want to know if Are there any notable user trends, transactions, or other metrics that could explain these events? or not
Analyzed by Hess - Reading Time Almost 10 min
What is Optimism?
- Optimism is a Layer 2 scaling solution for Ethereum that can support all of Ethereum's Dapps. Instead of running all computation and data on the Ethereum network, Optimism puts all transaction data on-chain and runs computation off-chain, increasing Ethereum's transactions per second and decreasing transaction fees.
To understand the above charts better, I put all tokens and their changes into one chart.
- Before the FTX crash, the OP token was the second top token based on the growth percentage. Matic price increased 15%, Op token increased 12.5%, while BTC, ETH, and Solana increased 2-3.5%.
- After the FTX crash, Sol's price dropped more than other tokens. OP was the second token that faced the highest drop compared to MATIC, BTC, and ETH.
- The price of tokens dropped for a short time, but they quickly recovered their prices. OP and Matic recovery was better than BTC, ETH, and Solana based on growth percentage. For so many days, OP price had the highest growth.
OP Transactions on Optimism
In My opinion, The transactions on the chain have fewer impacts on the token Price. But to clarify, I examined OP token transactions on the Optimism chain.
- Then OP Price started to increase on November 2. The total number of transactions that OP token was involved increase a little.
- I mentioned some key dates for the OP token in the Method section. I examined the average number of transactions on the Optimism chain during that time.
- The highest average number of OP transactions was on November 9, when OP price dropped after the FTX crash. The second-highest number of transactions was on a day that OP price hit 1.35$. On that day, The total number of transactions increased to 51K, while the average number of transactions between November and December was 29K
Swaps From and TO $OP
As I mentioned before, Trading activities on CEXs have a huge impact on Token price, but we don’t have access to that data. So, I examined the swap activities on DEXs.
- We already know that OP price increased to 1.35 on November 6. At that time, The total number of swaps and swappers from OP was higher than swaps and swappers to OP token. During that time, The total number of swaps to OP token was 14.6K, while the total number of swaps from OP token was 15.5K. About 1K higher than.
- Until December 8, The total daily number of swaps and swappers from the OP token was higher than The total number of swaps and swappers to the OP token. But after that time, The total daily number of swaps and swappers to OP tokens increased and became higher than swaps from OP tokens. During that time, Between December 8 and 14, The price of OP tokens increased.
Transfers $OP From CEXs to Optimism and Vice Versa
- The most important key is the amount of OP transferred from CEXs to the optimism chain. Because it shows users bought tokens and want to hold them in a safer place.
- Then OP Price hit 1.32$, Users transferred only 342K OP tokens. But when FTX crashed, About 19.5M OP transferred from CEXs to the Optimism chain.
- Overall, If I ignore November 13, I can not see any unusual trends.
$OP Price
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Despite the unfortunate circumstances in the cryptocurrency market resulting from the FTX exchange collapse, the positive sentiment around Optimism, a layer-2 scaling solution, is growing.
The coin currently trades slightly beneath $1.00 and faces strong resistance at $1.40. However, if it breaks the resistance, it can surge up to $2 with little additional resistance along the way.
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Interestingly, Optimism isn’t the only token with a positive bullish sentiment emerging in the industry. We’ve found five other tokens with solid potential to follow the same trend as Optimism.
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Optimism is a layer-2 blockchain scaling solution for Ethereum. It is designed to help decentralized applications scale to a level of mass adoption. The project integrates the stability of Ethereum while producing speeds that are ten times faster than the layer-1 blockchain.
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The price for OP, the token behind Optimism, is currently sitting at $0.95 and is facing strong resistance at $1.40.
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OP started November on a very bullish note as it broke above the October 2022 highs and attempted to break $1.40. However, any chance of penetrating the level was destroyed by the cryptocurrency market collapse, resulting from the fallout of the FTX exchange breakdown.
As a result, OP fell from $1.40 to reach as low as $0.78 during the collapse. However, it has since recovered as it heads back toward $1.00.
Nevertheless, a break above $1.40 could begin a strong trend higher for Optimism with little resistance to $2.00 – the highest closing price for the token.
A break above $2.00 will open the door for OP to create new highs for the token. In this case, additional resistance above $2.00 is expected at $2.40, $2.60, and $3.00.
Method
- There are some key metrics that Token Price increase and decrease based on those metrics.
- Almost all tokens in Crypto look after Bitcoin and some other pioneer tokens like ETH. For the First Part, I compared OP Price with other top native tokens and its changes before ad after November.
- CEX training activity has a direct relationship with price. Unfortunately, We don’t have access to CEXs data and can not examine the OP trading activities, but We have access to DEXs. So, I examined swap activities to and from OP tokens on the Optimism Chain.
- As I mentioned, We don’t have access to CEX trading activities, but I analyzed the flow and outflow of OP tokens from CEXs to Optimism and vice versa.
- Besides transfer to CEXs and vice versa, There were transfer activities on the Optimism chain. So I examined that type of transfer too.
- One of the most important metrics is TVL. Based on On-chain data, I examined Optimism TVL and its relation with the Optimism Native token.
- Important Date:
- November 6 and November 9: The introduction mentions ATH and Price drop.
- December 14: OP hitting $1.19
Full Analysis
OP Price Vs. ETH, BTC, Sol, and Matic
- ETH and BTC are two key tokens in the Crypto market. These two tokens impact the price of other tokens easily. For Example, Other tokens go down when the BTC price goes down. Although it is not always true most times, we can see their impacts on the Market. So, First, I compared OP price with ETH and BTC.
- Overall, The Pattern of OP token and its trends were like ETH and BTC Until Late November. When OP price Hitted 1.3$, ETH and BTC prices hit the highest price in the last 90 days.
- As You may know, the FTX exchange collapsed on November 7. Due to that, The Fear of losing money spread quickly on the market, so many users withdrew their tokens from exchanges or swapped them for stablecoins. This action from users caused a huge drop in all tokens. Almost the price of all tokens on the market dropped 30-50%.
- The Price of OP dropped more than ETH and BTC but recovered its price faster than ETH and BTC. Since November 30, The slope of OP price growth has been higher than ETH and BTC.
I already examined the ETH and BTC price and compared them with OP tokens. Now, It’s time to compare OP price with two native tokens of Polygon and Solana. Matic is the native token of Polygon and Sol is the native token of Solana.
- After the FTX crash, All three tokens dropped quickly. Among these tokens, Matic decreased lower than OP and Sol. FTX was one of the investors of the Solana chain. When FTX news spread, Solana's price dropped faster than other tokens.
- So, Until now, We know Matic kept its value better than OP and Solana until late November. But after November 30, The growth of OP price was much higher than Matic and especially Sol. You can see the pattern of the Orange line in the below charts.
Before the FTX crash, The total daily transferred OP amounts were 50-80M OP which didn’t increase too much when the OP price hit 1.35$. But during the second growth of OP token, Between December 10 and December 14, The total daily transferred OP amount increased significantly from 22M OP amounts to 2.7B OP. However, As you can see, The reason for OP growth wasn’t the amount of transfers because, before that, The OP price increased.
The Swapped amount of OP is more important than the total number of swaps and swappers. The Chart is based on OP amounts.
- When the OP token started to increase on November 3, The total daily swap amount to the OP token increased, and swapped amount from the OP token decreased. So, The daily net swap amount became positive during that time.
- After FTX Crash, The Daily Net amount was negative for almost all days. The reason that the OP price moved slowly is that maybe the swap amounts from the OP token and daily net amount were negative.
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Based on selected dates, The average number of swaps and swap amounts from and to OP token increased on November 9. November 9 was a day that OP price decreased and reached the lowest price after FTX crash.
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Based on average swap amount on November 6, When OP price hit 1.35$, The total swap amounts didn’t increase too much.
I examined the top platforms where user can swap their OP amounts. The highest number of swaps and swap amounts from OP tokens was on the Velodrome platform. When FTX crashed, Users swapped about 18M OP tokens on Velodrome. The second top platform was Uniswap, and after that was 1inch.
Overall, The total daily number of transactions and OP amounts from CEX to the Optimism chain was higher than transfers from the Optimism chain to CEXs. When the OP token hit 1.32$, The total number of transactions didn’t change too much, but the total transferred OP amounts increased a little.
- The Only unusual activity I can see from the below charts is when the FTX exchange crashed, and users transferred 19.5M OP tokens from CEX to the Optimism chain.
- Overall, In recent days, The total daily number of transfers to Optimism increased.
- The highest number of transactions and OP amounts from CEX to the optimism chain was on November 9.
I calculated the daily net of transferred OP from CEXs to the Optimism chain and vice versa to find any correlation between transferred amounts of OP price changes.
- It is interesting because when the net amount was negative ( transfers from Optimism to CEXs were higher than transfers from CEXs to Optimism ), The OP Price had better growth in comparison to when net amounts were negative.
Optimism TVL Credit to KIBA.
ALL CODES AND CONTENTS WERE WRITTEN BY HESS.
Conclusion
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Despite the recent bearish pressure, the outlook for Optimism still looks promising. However, it’s not only Optimism that looks to have a good upcoming few weeks.
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OP started November on a very bullish note as it broke above the October 2022 highs and attempted to break $1.40. However, any chance of penetrating the level was destroyed by the cryptocurrency market collapse, resulting from the fallout of the FTX exchange breakdown.
As a result, OP fell from $1.40 to reach as low as $0.78 during the collapse. However, it has since recovered as it heads back toward $1.00.
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Nevertheless, a break above $1.40 could begin a strong trend higher for Optimism with little resistance to $2.00 – the highest closing price for the token.
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One of the key metrics to watch for Optimism is tracking how much TVL is in the project. It is an excellent measure of how much activity is happening on the blockchain.
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