OP poised for a dead-cat bounce into resistance before probing the 0.685 Fib shelf

Comprehensive multi-timeframe technical review for OP (Optimism)

1. Market regime and context

• Timeframe mix: Daily (primary swing), Hourly (execution/24h outlook). The daily trend has rolled over after the Aug 13 peak, while the hourly shows a corrective bounce attempt inside a short-term downtrend.
• Current price: 0.6983, down ~2.5% from the prior daily close and sitting below the short-term moving averages and intraday VWAP.

2. Trend and moving averages

• Daily trend: Lower highs since 0.881 (Aug 13) and lower lows vs Aug 15/18, establishing a clear short-term downtrend channel.
• 20D SMA (approx): ~0.726. Price is below, indicating bearish short-term momentum.
• 50D SMA (approx): ~0.67–0.69. Price is hovering slightly above/on this band; losing it would open 0.66–0.65.
• MTF alignment: Price < 20D SMA but ≈ 50D SMA. This is a weak-to-bearish regime; bounces toward the 20D are likely to be sold.

3. Momentum (RSI, MACD, Stoch)

• Daily RSI(14) (approx): 45–52 range after the post-0.881 selloff; momentum is neutral-bearish. The strong negative day on Aug 14 (0.8736 → 0.7529) flipped momentum bearish and it hasn’t recovered.
• Hourly RSI: Dipped on the push to 0.689, showing mild bullish divergence vs the previous intraday low, enabling a bounce to 0.697–0.699. This is consistent with a short-lived mean-reversion bounce within a downtrend.
• Daily MACD: Bearish crossover after Aug 14; histogram likely below zero and expanding earlier this week; today it’s still negative, signaling rallies are countertrend.
• Hourly MACD: Curling from deeply negative toward flat, consistent with a corrective bounce into resistance.

4. Volatility and Bollinger Bands

• Daily Bollinger Bands (20,2) estimate: Midline ~0.726; lower band roughly ~0.61–0.62 given recent high vol. Price is in the lower half of the bands, indicating pressure but not at extreme daily oversold.
• Hourly bands: Price tagged/pierced the lower band near 0.689 and reverted toward the mid-band, supporting a modest bounce. Expect upper band rejections around 0.704–0.709 unless momentum materially improves.

5. Price structure: Support/Resistance and supply/demand

• Key resistances above: 0.705–0.709 (hourly supply and pivot S1 retest), 0.715–0.722 (hourly distribution), 0.733 (recent intraday failed attempts), 0.75 (daily shelf), 0.786–0.80 (value area before breakdown).
• Key supports below: 0.693–0.691 (intraday cluster), 0.687 (today’s session low zone), 0.675–0.671 (minor shelf), 0.667–0.657 (late-July base), 0.650–0.632 (June/early-Aug value area).
• Structure note: 0.705–0.709 was former intraday support turned resistance; expect first-touch rejection in a downtrend.

6. Fibonacci mapping (swing Aug 2 low to Aug 13 high)

• Swing low: 0.6319 (Aug 2), swing high: 0.8812 (Aug 13); range = 0.2493.
• Key retracements:
  • 38.2% ≈ 0.786
  • 50% ≈ 0.7565
  • 61.8% ≈ 0.7270
  • 78.6% ≈ 0.6852
• Current price ~0.698 is between 61.8% and 78.6%, leaning toward the deep 78.6% retracement (0.6852), which is a typical last line for bulls before a potential full round-trip to 0.66–0.63. Expect responsive buying near 0.685 on first test, but trend risk favors eventual probing of 0.685 and possibly 0.66.

7. Ichimoku (conceptual)

• Daily: Price below Tenkan and Kijun, with Kijun likely ~0.74–0.75; cloud ahead likely flattening with bearish tilt. Bearish alignment overall.
• Hourly: Price is below the cloud with Tenkan < Kijun and a red forward cloud. Rally attempts into 0.705–0.712 should find resistance at the cloud base/Span A.

8. VWAP and intraday context

• Today’s intraday behavior: Initial soft drift 0.71–0.72, breakdown to 0.689, and modest mean-reversion to ~0.697–0.699 into the close of the provided feed.
• Daily VWAP proxy: Likely ~0.704–0.707 given pre-breakdown time above 0.71 and subsequent heavier volume on the slide. Current price remains below VWAP: bearish. Expect supply near VWAP retests.

9. Pivot levels (calculated from prior session)

• Using Aug 18 H/L/C: H=0.7628, L=0.7167, C=0.7214 → Pivot P ≈ (0.7628+0.7167+0.7214)/3 ≈ 0.7336.
• S1 ≈ 2P − H ≈ 1.4672 − 0.7628 = 0.7044.
• S2 ≈ P − (H − L) ≈ 0.7336 − 0.0461 = 0.6875.
• Price reaction: Break under S1 (0.7044) converted it to resistance; S2 (0.6875) nearly matched today’s low. This symmetry strengthens the 0.704–0.709 sell zone and 0.685–0.688 take-profit zone.

10. Candlestick and pattern read

• Daily: Aug 14 formed a large bearish candle, initiating a distribution sequence. Subsequent days show lower highs and closes near lows; today is shaping like a continuation day unless price reclaims 0.705–0.709 with force.
• Hourly: Minor bullish divergence at the 0.689 low helped a bounce, but candles lack follow-through and have upper wicks into 0.697–0.699—supply present.
• Channel: Short-term descending channel from Aug 17–19; upper boundary aligns with 0.705–0.709.

11. Volume and participation

• Massive volume on July 28 and Aug 13–15 established a distribution top and subsequent exit liquidity. Recent sessions show declining but still elevated volume on down days, consistent with controlled sell pressure.
• Intraday today: Notable sell programs around 14:00–17:00 UTC; the rebound V-shape is shallow and on lighter volume, typical of a bear-market bounce.

12. Quant/mean-reversion and ATR context

• 14D ATR (approx): 0.05–0.07. A move from 0.705 to 0.686 (≈0.019) is well inside a single-session ATR—highly achievable within 24 hours.
• Z-score to 20D mean: (0.698 − 0.726)/σ where σ ~0.03–0.035 → z ≈ −0.8 to −0.9; room to mean-revert partially (to ~0.705) before rejoining trend lower.

13. Elliott wave framing (heuristic)

• From 0.881 high: A-wave down into Aug 15, B-wave bounce into Aug 17, C-wave unfolding into Aug 19–20 with potential extension to the 78.6% retrace (0.685). Micro divergences suggest C could be in its late stages, but bears often press into 78.6% before more material relief.

14. Scenario analysis (next 24 hours)

• Base case (55%): Short squeeze-less bounce into 0.704–0.709 (VWAP/pivot S1 retest), rejection, then drift/sell to 0.688–0.686; intraday wicks can probe 0.682–0.680; settlement ~0.690–0.695.
• Bear extension (25%): Weak bounce stalls <0.704; trend pushes straight through 0.687 toward 0.675–0.671 (late-July base) before a reaction; settlement ~0.678–0.685.
• Bull surprise (20%): Strong reclaim of 0.712 and 0.722 (hourly supply), triggering a broader squeeze toward 0.733; daily still below 20D SMA, so upside likely capped 0.733–0.740 unless breadth improves.

15. Risk management and invalidation

• Invalidation for the short idea: Sustained reclaim above 0.712 first, and especially >0.722 with volume (hourly close above), which would flip the intraday posture neutral and open 0.733–0.740.
• Structural risk: If 0.685 prints and absorbs quickly (no bounce), bear extension to 0.671/0.667 becomes likely; plan partials into 0.686.

Conclusion and trade plan

• Edge: Short-term trend is down, price is below VWAP and 20D SMA, and the market is approaching a textbook retest zone (0.704–0.709) with confluence from pivots, cloud base, and the descending channel top. Mean-reversion bounce provides favorable entry to position for a probe of the 78.6% Fib (≈0.685).
• Execution: Use a limit Sell on a bounce into 0.705–0.709 with profit-taking near 0.686 (just above the 78.6% level and S2) to front-run reactive buyers.
• 24h Directional call: Net lower after an early bounce; probability-weighted close in the 0.690–0.695 band after tagging 0.686 ± 0.004.