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Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- Price rejection at resistance at $1.4 caused OP to fall back to the $1.2 asking area.
- Futures market data showed margins between buyers and sellers were tight.
The $1.2 demand zone continued to provide optimism [OP] bulls with a safe haven against the relentless selling pressure on the higher time frames. Despite buyers’ best efforts, Optimism made another higher low after the price rejection at the $1.4 resistance.
Read Optimism [OP] Price forecast 2023-24
Bitcoin [BTC] Stabilizing at $26k last day eased some of the selling pressure. However, sellers remained active with the intention of falling below the critical demand zone.
Will the demand zone come to the rescue of the bulls again or can the bears gain the upper hand?
Source: OP/USDT on Trading View
The $1.2 asking area has been critical for bulls over a two-month period. In mid-July, the bulls recovered from the demand area and touched $1.8. However, in August and September the bears took over, with prices reaching the demand zone again on August 17 and September 11.
Even though the demand zone has been defended three times, current market conditions could give sellers the upper hand to move below the $1.2 price zone.
If BTC falls below $26,000, sellers can break $1.2 with targets of $1 to $1.1. On the other hand, if BTC moves back to $27,000, it could strengthen the bulls again with profit levels of $1.35 to $1.4.
Meanwhile, the Relative Strength Index (RSI) remained close to the oversold zone, while the Chaikin Money Flow (CMF) remained near zero. This indicated a lack of buying pressure and moderate capital inflows.
How much are 1,10,100 VPs worth today?
Buyers and sellers were equal to each other
Source: Mint glass
The data on the long/short ratio showed that the margins between longs and shorts in the futures market are tight. With a $1.35 million difference in open contract positions, neither buyers nor sellers had any significant advantage.
As such, the long-term optimism price action will most likely follow that of BTC. Ergo, market speculators need to monitor the price of Bitcoin for optimized trades.
