Optimism poised for a 75% draw downTLDR: Lots of well established TA suggests OP takes out the previous lows at 0.41.
Analysis
I am going to begin with the divergence primer just in case a reader is unfamilar with the divergences and what they mean.
Divergence Primer
Classic Divergence (Trend Reversal)
Bearish: Higher highs on price action but lower highs on the indicator
Bullish: Lower lows on price action but higher lows on the indicator
Hidden (Trend Continuation)
Bearish: Lower high on the price action and higher highs on the indicator
Bullish: Higher low on the price action and a lower low on the indicator
As the chart shews both OPUSD and OPBTC both have great deal of hidden bearish divergence on the Log MACD (and histogram) as well as the RSI and Stochastic RSI.
The Gaussian channel is pretty powerful as support and resistance and generally speaking I get excited to buy beneath a red Gaussian channel or when I see price action powering its way through. Not so much with OP right now, with the hidden bearish divergences. I expect the top of the channel will continue as resistance.
Likewise the 100 Daily Moving Average is right above price action and I assume it will continue to act as resistance as well.
The volume situation doesn't look good to me either. With price breaking out above the Value Area of the VPVR to create all time highs and coming back in on both OPUSD and OPBTC I think we are going to see more typical behavior and the value area will act as resistance, especially on OPBTC.
The On Balance Volume has set virtually equal highs with this current peak and the peak from September. That is a sign of bullish exhaustion. It is also concerning that both the 10 and 20 SMA are below the 100. If the OBV regresses to the mean (the 10 or the 20) then that dip would get me deep into the money. Not all the way to target, but deep enough I can have a fairly profitable stop loss.
Here is a similar move on Matic over two years ago where Matic dupped and took out what looked like strong support at the 0 line before rallying up to just above the 0.618 retracement before crashing. From there it went 400x
If OP has a similar run then I will be quite pleased. Also, if OP crashes down to about the 0.28c I will go in full accumulation mode and hopefully we will see it run in another year or so.
Macro I still think a lot of the equities indices are mostly done with their downside. I also like a lot of the "OG" crypto currency coins like XMR, Dash, XPR, BCH and I think a lot of the nu-crypto coins that were the top runners of 2021 are going to crash at bit more before going into long consolidation. That is a lot of moving parts for me to hopefully get right.
