Optimism (OP) Token Unlock Event Approaches as On-Chain Activity Spikes

Optimism [OP] has been a standout Ethereum-compatible Layer 2 scaling solution since the launch of its public mainnet in December 2021.

Optimism (OP) Token Struggles Despite Strong On-Chain Activity

Layer 2 scaling solution Optimism has seen its governance token, OP, trade in a tight range for an extended period. Despite this lackluster price performance, on-chain activity has picked up in recent days.

OP price has been consolidating for four months now. In the daily timeframe, the short-term Simple Moving Averages (SMA) and Exponential Moving Averages (EMA) continue to remain below their respective 200-day MAs, indicating prolonged bearish momentum.

However, large transactions on Optimism spiked to a near five-month high on October 15, suggesting that deep-pocketed holders may be positioning ahead of upcoming events, possibly anticipating market shifts in OP price.

Optimism recently concluded its fifth airdrop, distributing 10.3 million OP tokens to about 54,700 addresses.

Optimism launched with a supply of 4.294 billion OP tokens and had a rocky start as the mainnet experienced degraded performance, being overwhelmed by high demand in the first airdrop.

During this initial airdrop in June 2022, the Optimism Foundation distributed 200.1 million OP tokens to 248,699 addresses. The second airdrop saw more participation, with over 308,000 eligible addresses receiving 11.7 million OP tokens in total.

According to Token unlocks monitoring tool Tokenomist, Optimism is set for a major token unlock on 31st October. Around 31.34 million tokens, or 2.5% of OP’s circulating supply, will be unlocked in allocations to investors and core contributors.

Optimism was trading at $1.72 above a rising lower trendline support at the time of writing. The setup presents an opportunity for OP bulls to challenge the resistance between $1.93 and $1.98 which coincide with the 200-day EMA and SMA respectively.

To confirm a breakout from current range, OP/USDT needs to definitively breach the $2.00 psychological hurdle and flip it into support.

Interestingly, OP’s price has shown the strongest 30-day and 60-day correlation with Avalanche (AVAX). The correlation with AVAX has remained fairly steady in contrast to the correlation with Bitcoin (BTC), which has fluctuated.

Both Optimism and Avalanche are Ethereum-compatible blockchain platforms designed to address scalability limitations. However, they differ in their underlying architectures.

Optimism is powered by Optimistic rollups, which bundle volumes of transaction data into a single transaction on the underlying Ethereum mainnet. Avalanche, on the other hand, is a standalone L1 blockchain with its consensus mechanism.

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