Time to Buy Optimism

The Optimism cryptocurrency has risen 260% in value since the beginning of 2023. Reaching its high of $3.285, the price has started to form a corrective move that has managed to fill the last bullish imbalance zone on the weekly timeframe.

OPUSD (1 Week Time Frame): November 2022 - August 2023

The fill took place with the wick of a candle, which represents a strong reaction to this zone and the potential for a price increase.

Zooming in, signals are also forming on the daily time frame, confirming a potential bullish impulsive move. Indeed, the price closed above the lower high and thus changed the structures from bearish to bullish.

OPUSD (1 Day Time Frame): November 2022 - August 2023

As a correction is typically expected after such a close, this situation was no exception. The correction stopped at the 0.5/0.382 Fibonacci zone, filling the important imbalance zone.

The technical side of this cryptocurrency shows stable buy characteristics. However, before entering buy positions, it will be necessary to closely monitor the price development. If the price closes below the low of $0.881 on the daily timeframe, there is a possibility that the price will begin to enter into a deeper correction.

A BIT about Optimism

The project employs the technology called "Optimistic Rollup," which is a type of layer 2 scaling solution for blockchains. This technology allows for a larger number of transactions to occur off the main blockchain network and subsequently be included in blocks on the main chain, reducing the load on the main chain and increasing the overall scalability of the system.

A key feature of Optimistic Rollup is the "optimistic" approach to transaction processing. When a user sends a transaction off the main blockchain, it is assumed to be valid. However, instead of immediate inclusion in the main chain, there's a "rollup" process that takes place within the side chain. Only if an invalid transaction is detected corrective measures are taken.

This approach significantly boosts transaction speed and reduces fees compared to having all transactions conducted directly on the main blockchain. Optimism thus represents one of the various initiatives aimed at addressing scalability challenges faced by blockchain networks, contributing to the widespread adoption of decentralized applications and cryptocurrencies.