Optimism [OP] Plummets 29% in Ten Days, Bearish Trend Persists

Optimism [OP] has experienced a significant decline, shedding 29% of its value over the past ten days. This retracement has erased all the gains made from 9 to 26 April, and at the time of reporting, sellers were dominant, indicating further potential losses. The market structure remains bearish, with the price failing to push beyond the recent lower high at $0.92 set in mid-March. After forming another lower high at $0.842, OP bulls faced rejection once again, highlighting the ongoing bearish sentiment.

The drawdown of 29% over the past ten days is supported by technical indicators such as the On-Balance Volume (OBV) and the Awesome Oscillator. The OBV is back at the lows formed in early April, while the Awesome Oscillator has noted a bearish momentum shift as the indicator fell below the zero line. These indicators align with the longer-term bearish market structure, suggesting that investors and swing traders should expect further losses.

A move below the local support at $0.59 would signal that OP may be gearing up for a drop to $0.51. Traders can use a retest of the $0.59-level as resistance to go short. The presence of high leverage short liquidations around the $0.62-level means that a squeeze may be possible, potentially leading to a minor price bounce. The $0.6-$0.63 region is an attractive short-term target, and a price bounce over the next couple of days could give short sellers an opportunity to enter the market.

However, the bullishness of Bitcoin [BTC] could shift OP’s market sentiment. A bullish Bitcoin market could provide a counterbalance to the current bearish trend in OP, potentially leading to a change in market dynamics. Investors and traders should keep an eye on Bitcoin's performance as it could influence the future direction of OP.