With the impending release of Ethereum 2.0, investors are depositing massive amounts of ETH to the Optimism smart contract, with deposits reaching 40,000 coins, an unprecedented quantity of coins deposited to Optimism in the last 90 days.
Aside from the massive increase in deposits, Optimism experienced an increase in trading volume, which is a clear fundamental hint that the present surge of the OP token is loaded with speculative transactions and that we may see a sharp decline in volume after the Ethereum update is released.
Analysts at Santiment recommended Elliott Waves models for Optimism, which show that the asset will lose momentum in the next “correction wave.” Given the asset’s low market capitalization and activity, it is unclear whether the Elliot Waves price model is applicable in this scenario.
Santiment also frequently use social volume, which typically shows the number of interactions between users, hashtags, and trends on social media platforms such as Twitter. Unfortunately, social volume contradicts trading volume and the market price of the OP token.
OP technical evaluation
Because the Optimism coin lacks trading history, not every technical signal is available, limiting prediction and analysis to shorter-term timeframes. For the time being, both intraday and daily timeframes indicate that OP is very oversold, which is a no-brainer given the 140 percent gain.
At the time of writing, OP was trading at $1.9 and had had a 5% drop in the previous two days.