After bottoming out, L2 tokens have exploded | Credit: Veronica Cestari
* L2 tokens have staged an explosive comeback, with ARB up 89%, OP 95%, and IMX 75% from recent lows.
* All three altcoins have cleared bearish structures (descending channels, falling wedges, and triangles).
* A sustained ETH rally is critical, as a reversal could invalidate gains and send them toward previous lows.
Some weeks ago, many Ethereum Layer-2 tokens were considered stagnant. But as of this writing, they’ve staged a dramatic comeback, surging nearly 100% in a short span.
Fueling this explosive rebound is Ethereum’s price rally, which has pushed the cryptocurrency back above $3,600. While ETH has surged by 45%, these altcoins, including Arbitrum (ARB), Optimism (ARB), and Immutable (IMX), have recorded more gains.
Here is how that happened, and what lies ahead for their prices.
Arbitrum (ARB)
On April 7, Arbitrum’s price hit an all-time low of $0.25. Today, ARB is up 89% from that point, thanks to the rise in demand for this month.
From a technical perspective, the daily chart shows that ARB has broken above the upper trendline of a descending channel. Amid this breakout, the Awesome Oscillator (AO) has risen to the positive region, indicating strong bullish momentum.
To support the bullish bias, the Average Directional Index (ADX) has risen to 32.67. This ADX reading indicates strong directional movement to the upside.
Should this remain the same, Arbitrum’s price might retest $0.73. Once this happens, ARB might reclaim the $1 psychological level.
On the contrary, if selling pressure increases, and ETH’s price declines, ARB might fall to a new all-time low of $0.24.
Optimism (OP)
Another Ethereum layer-2 token that has recorded notable gains lately is OP, the native cryptocurrency of the Optimism network. Optimism’s price hit an all-time low on June 18.
As of this writing, the market value has increased by 95% %, and currently trades at $0.78. From the image below, the daily chart shows that OP’s price action is similar to ARB’s.
But in this case, the token broke out of a falling wedge to reach its highest level since May. By the look of things, it does not seem like the altcoin will give up the gains yet.
One reason for this is the Money Flow Index (MFI), which has risen to 87.64. If sustained, the MFI reading might drive OP’s market value above $1.03.
If that were to happen, Optimism’s price might hit $1.40 soon. However, if bears tug the price back below the upper trendline of the wedge, OP might decline to $0.55.
Immutable (IMX)
Lastly, IMX, Immutable’s native token, is also one of the few Ethereum layer-2 tokens that have significantly recovered. Today, its price is $0.61, up 75% from the all-time low it reached on June 22.
Like ARB and OP, IMX price bounced this hard after ETH’s price hit higher highs. On the daily chart, IMX has broken above the upper trendline of the descending triangle.
Following the breakout, the Chaikin Money Flow (CMF) is above the zero signal line. If this trend continues, IMX’s price might surge to $0.75.
Once this happens, the token might rise to the $1 psychological zone. On the contrary, if ETH’s price experiences a notable correction, the altcoin might slide to $0.35
Read more on CCN – Capital & Celeb News
