Optimism (OP) has exhibited impressive resilience amidst the ever-changing cryptocurrency landscape, with a notable price increase of 13.53% in the past seven days. Although there has been a slight decline of 1.80% in the last 24 hours and a further 1.35% shrinkage within the hour, Optimism is still on an upward trajectory.
Currently priced at $1.68 per OP, which is still 48.38% below its all-time high of $3.26, traders and investors are eager to understand the reasons behind its recent gains. This article explores the factors that have contributed to Optimism’s recent surge and analyzes its prospects.
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High Profile Hack Could Stall Optimism (OP) Bullish Trajectory
Coinbase's newly launched BASE network, which was built on the Optimism Stack, suffered a setback when it became the target of a backdoor contract exploit. Unfortunately, this resulted in the loss of 597 Ether, which is equivalent to around $1 million.
The exploit involved exploiting a backdoor contract on the BASE Chain, which allowed the continuous minting of tokens that were subsequently sold for profit. The exploiters managed to mint 40 different tokens, generating significant profit, which was then moved out of the perpetrators' address.
As BASE is an anchor for the OP Stack, there are concerns that the recent exploit could have repercussions on all associated protocols, including the Optimism network. Furthermore, the hype surrounding BASE had attracted several new addresses to the Optimism network, potentially dampening investor sentiment and having a subsequent impact on OP's price.
Following BASE's launch in late February, the number of active addresses on the Optimism network increased. However, the recent hack may stall this growth, as investors exercise caution in the wake of the exploit.
Will The Bulls Sustain The Impressive Rally?
Optimism (OP) has shown resilience in the market despite the recent BASE exploit. The OP/USD daily chart indicates a promising bullish momentum with the price surpassing critical support levels. Short green candlesticks formed above the $1.631 support level signify the market's determination to keep the price afloat.
The technical indicators further reinforce the bullish outlook for Optimism. The Moving Average Convergence/Divergence (MACD) remains above the signal line, with green histogram bars indicating the asset's bullish momentum. Additionally, the Relative Strength Index (RSI) has entered the overbought region, reaching a value of 75, suggesting a considerable increase in buying pressure on OP.
However, traders and investors should remain cautious despite the positive market sentiment. The recent BASE exploit has raised concerns about the potential impact on Optimism's network and the broader sentiment surrounding the token. The cryptocurrency market is volatile, and external events can significantly affect token prices. Thus, market participants must monitor developments related to the exploit and assess its potential consequences on Optimism's price trajectory. Staying informed and vigilant in such a rapidly changing market is crucial for making well-informed decisions.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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