The Season 8 Governance Update for Optimism [OP] was released on 12 June. It outlines a refined purpose of governance and is intended to reduce platform risk for Superchain users. It also expands governance beyond just financial interests by introducing voting rights for four key stakeholder groups, while also bringing an emphasis on governance-minimized decision making.
These developments have been a major decentralization push and mean active users have a greater say while reducing the burden for occasional participation. However, it does little to soothe short-term price volatility.
After ten weeks of trading within a range, the bulls were finally forced to give up control of the $0.59 support. The price of Optimism fell below the range low. It had tested the mid-range level a week ago, affecting a bullish structure break.
The volatility around Bitcoin [BTC] gave the bulls too much to cope with. The rejection at the $0.72 mid-range level was followed by a half-hearted last stand at the $0.59 demand zone. During this struggle, the OBV tried to climb higher, but it was unsuccessful.
At the time of writing, Bitcoin had shed 2% of its value in four hours to fall to $103.3k. It also climbed by 1.3% within three hours to trade at $105k. Optimism and the rest of the altcoin market saw wider swings within the past 12 hours. For example, OP was up 4.2% in the three hours before press time.
However, its structure was firmly bearish on the 1-day chart. The falling OBV and RSI meant that short sellers can look for trade entries targeting the $0.51 support level next.
The 3-month lookback period liquidation heatmap revealed that there were two clusters of liquidity that OP built up over the past ten days. The descent to $0.59 saw a magnetic zone develop at $0.69. The rally to this area saw the $0.59 region develop more long liquidations.
The retest of the mid-range resistance at $0.72 and the subsequent retracement saw these long liquidations taken out on 13 June. The bulls, fearful of volatility, lacked the strength to drive the prices higher, with a wary eye on wider market developments as well.
Finally, the $0.53-$0.55 range is a magnetic zone of interest, which could see a rebound from Optimism. However, Bitcoin’s movement will heavily dictate the sentiment behind altcoins, and traders should remain wary of BTC’s trends.
