Losses mount for Optimism as the market suddenly flips from bullish to bearish, wiping significant gains made after it rebounded last week. According to CoinMarketCap, the token is down over 21% since last month, putting significant pressure on investors as the market continues with its choppy trading days.
Despite the market’s hostility in the past 24 hours, on-chain news still reinforces investor confidence as the platform’s Superchain continues to grow. But questions remain as to how this can affect the token’s price in the coming days and weeks.
Conduit, Mode, And Zora Join Optimism Collective Security Council
Last Saturday, the official Optimism X account revealed that Conduit, along with Zora and the Mode Network, gave their L1 contract upgrade keys to the Optimism Collective Security Council. According to Optimism, this is “a significant step for these chains to progress towards Stage 1 Decentralization.”
🤩Heading to Stage 1!
Today, @modenetwork @zora and @metal_l2 officially transferred their keys to the Optimism Collective Security Council.
This is a significant step for these chains to progress towards Stage 1 Decentralization.
Read more👇 https://t.co/c1yRLQrQyN
— Optimism (@Optimism) August 8, 2024
Conduit released a post detailing the reasoning why the move is significant for the participating platforms’ decentralization.
“Rollups must be decentralized in order to be secure and censorship-resistant. But that isn’t feasible from day one. Optimism has a 3-stage process for Superchain rollup teams to gradually transition their chains to full decentralization…,” stated Conduit on their thread.
Rollups must be decentralized in order to be secure and censorship-resistant. But that isn’t feasible from day one. Optimism has a 3-stage process for Superchain rollup teams to gradually transition their chains to full decentralization, inspired by @VitalikButerin:…
— Conduit (@conduitxyz) August 8, 2024
This is in line with what the Optimism Collective Security Council is about. In its proposal stages, the Security Council will effectively hinder any attempt at one-party control over the network and the systems beneath it. The move will help keep the network secure while keeping scalability on the table for developers.
The scalability half is Optimism’s greatest strength. Optimism said that the first half of the year saw open-source contributors push over half of the platform’s current features in the OP stack. This commitment to decentralization along with network features helps it to be flexible and scalable making Optimism a viable investment for the long term.
Optimism Still Looking At Minor Hurdles In The Long Run
The market rebound created gains for investors while this week’s opening moves wiped the majority of it to the ground. This created an atmosphere of fear, uncertainty, and doubt for the token’s future movement. As of writing, the token remains on the $1.2-$1.6 price range which it entered last week because of the market retreat.
The slight uptick in price by the tailend of last week has exhausted the bears, putting OP into consolidation mode for the coming weeks. If the bulls are successful in defending this position, the token will see itself trading on a narrower range before shooting up toward the $2 mark.
But this can only happen if the market recovers from its 5% downward move today. If they can weather the coming FUD within the next two weeks, OP has a chance to regain lost ground pushing its price upward.
Featured image from KuCoin, chart from TradingView