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Optimism token loses another key support. What next?

Optimism token loses another key support. What next?

Optimism is a Layer-2 scaling solution on Ethereum Optimism price is falling amid a…

The post Optimism token loses another key support. What next? appeared first on CoinJournal.

Optimism token loses another key support. What next?
  • Optimism is a Layer-2 scaling solution on Ethereum

  • Optimism price is falling amid a decline in ETH following the much-anticipated Merge

  • OP, the native token, has lost support and faces further bearish pressure

Ethereum Layer-2 scaling solution Optimism OP/USD shows fewer signs of renewal. A week after the expected Ethereum Merge, Optimism crashed by around 15%. That happens amid fading hype around post-Merge gains in Ethereum-related tokens.

Do not, however, get it twisted. Ethereum’s shift from Proof-of-Work to Proof-of-Stake introduces great benefits. These impacts will be realized in the longer term, and linked platforms such as Optimism will benefit. Meanwhile, investors may have to put up with a bearish market for Optimism after the token lost key support. The bearish market also reflects concerns about tighter economies as Central Banks hike rates to tame inflation.

Optimism prediction as token loses grip of $1.0

Optimism token trades at $0.922, slipping below $1, a support zone. The price level means Optimism has more than halved since its August high of $2.2. That also suggests a bubble burst since it witnessed a strong surge in July on the back of strong fundamentals.

Source – TradingView

A technical outlook shows that Optimism has fallen below the 20-day and 50-day moving averages. The decline below the $1 support opens chances for further declines. 

A look at the RSI shows a reading of 38. The reading indicates increased selling pressure. The token has more room to decline before we get to the oversold territory. Optimism will potentially continue to decline to find support at $0.74.

Summary

There is a lack of upside momentum for the Optimism token. The token lost important support at $1. It means that we should look for lower prices. The next support is $0.74 due to the weak sentiment.

The post Optimism token loses another key support. What next? appeared first on CoinJournal.

Source: CoinJournal: Latest Bitcoin, Ethereum & Crypto News

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4 bearish factors for Bitcoin this week

The Federal Reserve meeting scheduled on Wednesday may be hawkish for the dollar Bitcoin might give up some of its 2023 gains on a hawkish Fed All eyes are on the Fed’s view on inflation, growth, future interest rates, and quantitative tightening The Federal Reserve’s monetary policy decision is scheduled this week. It is the […]

The post 4 bearish factors for Bitcoin this week appeared first on CoinJournal.

  • The Federal Reserve meeting scheduled on Wednesday may be hawkish for the dollar
  • Bitcoin might give up some of its 2023 gains on a hawkish Fed
  • All eyes are on the Fed’s view on inflation, growth, future interest rates, and quantitative tightening

The Federal Reserve’s monetary policy decision is scheduled this week. It is the first time the FOMC (Federal Open Market Committee) meets in 2023, and the stakes are high for the US dollar.

Bitcoin has strengthened against the US dollar in January so far, in sync with other fiat currencies. Therefore, whatever the Fed decides on Wednesday will affect Bitcoin price too.

A hawkish Fed may turn up being bearish for Bitcoin. These are the four areas where the Fed may express its hawkishness: inflation outlook, growth outlook, interest rates level, and quantitative tightening.

Inflation outlook

The Fed is committed to bringing inflation to its 2% target. This is why it has raised rates so aggressively, so if the Fed says that inflation is embedded and upside risks remain, then the US dollar should move higher.

In this scenario, the market will bet that the Fed sees ongoing rate hikes as appropriate.

Growth outlook

The currency stance is that a sustained period of below-trend growth is likely. If the Fed changed its view and sees recession required to have a material impact on the inflation outlook, that would also trigger a sharp move higher in the dollar.

Interest rates

Ultimately, it is all about the interest rate level. The funds rate range has reached 4.25%-4.50%, and all eyes are on what the Fed does and says on Wednesday.

The base case scenario is that the Fed will hike by 25bp and says that ongoing interest rate increases are appropriate. Therefore, anything more than that should be bullish for the dollar and bearish for Bitcoin.

For example, the Fed might hike 50bp. This is a risk going into the meeting, especially considering that inflation is not backing down as fast as initially thought.

Quantitative tightening

The Fed currently shrinks the balance sheet at a pace of $95 billion/month. A decision to accelerate the balance sheet reduction would be very hawkish for the dollar.

The post 4 bearish factors for Bitcoin this week appeared first on CoinJournal.

Source: CoinJournal: Latest Bitcoin, Ethereum & Crypto News

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