Optimism $OP (SHORT) Currently Overvalued Compared to Polygon Optimism, a layer 2 scalability play on Ethereum is currently trading at an $8.2B fully diluted valuation, as compared to Polygon's $9.2B valuation.
While TVL (total value locked) on Optimism is soaring, it's still only $1.1B compared to Polygon's $1.7B.
We're likely just seeing a rotation of money chasing DeFi opportunities in the Optimism ecosystem as there are no DeFi protocols in the Optimism ecosystem that innovate past what is already available on other L1 and L2 ecosystems.
We've seen similar rotations like this before, most of which result in a large run up followed by a steep crash in token price.
Lastly, only 5% of OP tokens are circulating, making the price extraordinarily sensitive and volatile, particularly to the downside as more tokens become unlocked and flood the market.
Looking at two different shorting opportunities based on key margin pressure level resistance, keeping tight stop losses in case $ETH pumps on the merge narrative and the ETH ecosystem follows suit. Check out my YT channel to learn more about margin pressure levels.
