In the cryptocurrency market today, notable altcoins are recovering after two days of volatility. Optimism and Arbitrum are standing out with significant growth.
Optimism (OP) Analysis
OP’s daily chart reveals a falling wedge pattern, which began after a rejection from the 2.77 $ high on December 07. The prolonged correction saw OP decline sharply, hitting a low of 0.78 $ on February 03, where it tested the lower trendline of the wedge. However, OP has now rebounded to 1.19 $ and is moving toward the upper resistance of the wedge. If the price successfully breaks out and retests the wedge, the next key resistance lies at 1.50 $, coinciding with the 50-day moving average (MA). A decisive breakout above this level could drive OP towards 1.81 $, marking a potential 51% increase from the current price.
Arbitrum (ARB) Analysis
Similar to OP, ARB is also trading within a falling wedge pattern, which developed after a sharp rejection from the 1.23 $ high on December 6. The recent downtrend led ARB to a low of 0.34 $ on February 03, where it tested the wedge’s lower boundary. Now, ARB has bounced back to 0.43 $ and is approaching the upper resistance of the wedge. A successful breakout and retest could push ARB towards the next resistance zone at 0.64 $, which aligns with the 50-day MA. A confirmed breakout beyond this level could fuel a rally towards 0.86 $ and eventually 1.18 $, representing a potential 60% increase from the current price.
Conclusion
Both OP and ARB are nearing critical resistance levels, indicating a potential trend reversal. However, the broader crypto market sentiment, especially the price movements of Ethereum and Bitcoin dominance, will play a crucial role in determining their next moves. If Ethereum continues its recovery and Bitcoin dominance declines, altcoins like OP and ARB could gain momentum. For now, traders should closely monitor breakout confirmations, as they could indicate the next major price move for both tokens.
Current movements of OP and ARB stand at the verge of a possible breakout, yet investors should observe general market conditions.
