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Here’s why OP token price is falling despite Optimism buyback approval

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OP token price is falling despite Optimism buyback approval
OP token price is falling despite Optimism buyback approval
  • Optimism (OP) underperformed as risk-off sentiment hit high-beta altcoins hardest.
  • The buyback plan is delayed, small, and lacks immediate supply reduction.
  • Technical breakdown below key averages has triggered strong sell-side momentum.

The Optimism (OP) token is falling even after token holders approved a long-awaited buyback plan.

At first glance, this seems counterintuitive, since buybacks are often seen as bullish for token prices.

However, the market reaction highlights the gap between long-term fundamentals and short-term trading reality.

OP is currently trading around $0.27, down roughly 8.8% in the past 24 hours.

This decline is sharper than the broader crypto market’s 5.26% drop over the same period.

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The underperformance signals that OP is facing pressures beyond simple market noise.

Market-wide risk aversion is dragging down high-beta tokens

The crypto market is currently in a clear risk-off phase.

Investors are rotating away from speculative assets and toward traditional safe havens.

Gold has surged to record highs, reflecting heightened global uncertainty.

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At the same time, Bitcoin has slid to around $85,000.

When Bitcoin weakens during risk-off periods, altcoins typically fall harder.

OP is considered a high-beta asset, meaning it magnifies broader market moves.

As a result, even modest market stress translates into outsized losses for OP.

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The Fear and Greed Index sits at 38, firmly in “Fear” territory.

This indicates traders are prioritising capital preservation over growth opportunities.

In such conditions, narratives like governance wins and future buybacks struggle to gain traction.

Instead, liquidity dries up and sellers dominate price action.

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This macro backdrop sets the stage for OP’s underperformance.

The buyback approval didn’t meet short-term market expectations

While Optimism token holders have approved a proposal to allocate 50% of Superchain sequencer revenue to OP buybacks, the market has reacted negatively rather than positively, and the main reason is timing.

The buybacks are scheduled to begin in February, not immediately. For short-term traders, delayed execution reduces the perceived impact.

The scale of the program also disappointed investors. Annual buybacks are estimated at around $8 million.

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That figure represents roughly 1.5% of OP’s current market capitalisation.

Such a modest allocation is unlikely to offset sustained selling pressure. Additionally, the plan does not include token burns.

Repurchased tokens are sent to the treasury, leaving future supply decisions uncertain.

At the same time, token unlocks continue to add supply to the market. This imbalance weakens the buyback narrative in the near term.

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Rather than acting as a price floor, the announcement became a “sell the news” event.

Conclusion: long-term promise, short-term pressure

OP’s price decline reflects a convergence of macro, narrative, and technical factors.

Market-wide risk aversion has reduced demand for speculative altcoins.

The buyback plan, while structurally positive, lacks immediate impact.

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The token recently broke below its 7-day and 30-day simple moving averages, triggering algorithmic and momentum-based selling.

Optimism (OP) price
Optimism (OP) price chart | Source: TradingView

The Moving Average Convergence Divergence (MACD) indicator has also turned negative, pointing to accelerating downside momentum.

The Relative Strength Index (RSI) remains near 44, suggesting OP is not yet oversold, meaning there is little technical support from bargain hunters.

Together, these forces explain why OP is falling despite positive governance news.

Long-term, tying token value to Superchain revenue remains a meaningful shift.

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Short-term, however, traders are focused on survival rather than future alignment.

The next major test, according to analysts, will be whether OP can hold the $0.2528 support level.

Upcoming macro data, particularly US inflation metrics, may determine the next move.

But until the market sentiment improves, OP is likely to remain under pressure despite its improving fundamentals.

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Crypto World

Solana (SOL) Plunges Below $100, Bitcoin (BTC) Recovers From 15-Month Low: Market Watch

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BTCUSD Feb 4. Source: TradingView


Meanwhile, HASH and HYPE have declined the most over the past 24 hours after charting impressive gains lately.

Bitcoin’s adverse price actions as of late worsened yesterday when the asset tumbled to its lowest positions since early November 2024 at $73,000 before recovering by a few grand.

Most altcoins followed suit with enhanced volatility, but some, such as SOL, HYPE, and CC, have been hit harder than others.

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BTC’s Latest Rollercoaster

It was just a week ago when the primary cryptocurrency challenged the $90,000 resistance ahead of the first FOMC meeting for the year. After it became official that the Fed won’t cut the rates again, BTC remained sluggish at first but started to decline in the following hours.

The escalating tension in the Middle East was also blamed for another crash that took place on Thursday when bitcoin plunged to $81,000. It bounced off to $84,000 on Friday but tumbled once again on Saturday, this time to under $75,000. Another recovery attempt followed on Monday, only to be rejected at $79,000.

Tuesday brought the latest crash, this time to a 15-month low of $73,000. It has rebounded since then to just over $76,000, but it’s still 3% down on the day. Moreover, it has lost 14% of its value weekly and a whopping 18% monthly.

Its market capitalization has plummeted to $1.525 trillion on CG, while its dominance over the alts has declined to 57.3%.

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BTCUSD Feb 4. Source: TradingView
BTCUSD Feb 4. Source: TradingView

SOL Below $100

Most larger-cap altcoins have felt the consequences of the violent market crash lately. Ethereum went from over $3,000 to $2,100 in the span of a week, before bouncing to $2,280 as of now. BNB is down to $760, while SOL has plummeted to under $100 after a 7% daily decline.

Even the recent high-flyer HYPE has retraced hard daily. The token is down by 11% to $33. CC and ZEC are also deep in the red, while XMR has gained the most from the larger caps.

The cumulative market cap of all crypto assets has seen more than $70 billion erased in a day and is down to $2.65 trillion on CG.

Cryptocurrency Market Overview Feb 4. Source: QuantifyCrypto
Cryptocurrency Market Overview Feb 4. Source: QuantifyCrypto

 

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Pumpfun Unveils Investment Arm and $3 Million Hackathon

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Pumpfun Unveils Investment Arm and $3 Million Hackathon


PUMP rallied as much as 10% but erased its gains as crypto markets dipped.

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Spot Bitcoin ETF AUM Hits Lowest Level Since April 2025

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Spot Bitcoin ETF AUM Hits Lowest Level Since April 2025

Assets in spot Bitcoin (BTC) ETFs slipped below $100 billion on Tuesday following a fresh $272 million in outflows.

According to data from SoSoValue, the move marked the first time spot Bitcoin ETF assets under management have fallen below that level since April 2025, after peaking at about $168 billion in October

The drop came amid a broader crypto market sell-off, with Bitcoin sliding below $74,000 on Tuesday. The global cryptocurrency market capitalization fell from $3.11 trillion to $2.64 trillion over the past week, according to CoinGecko.

Altcoin funds secure modest inflows

The latest outflows from spot Bitcoin ETFs followed a brief rebound in flows on Monday, when the products attracted $562 million in net inflows.

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Still, Bitcoin funds resumed losses on Tuesday, pushing year-to-date outflows to almost $1.3 billion, coming in line with ongoing market volatility.

Spot Bitcoin ETF flows since Jan. 26, 2026. Source: SoSoValue

By contrast, ETFs tracking altcoins such as Ether (ETH), XRP (XRP) and Solana (SOL) recorded modest inflows of $14 million, $19.6 million and $1.2 million, respectively.

Is institutional adoption moving beyond ETFs?

The ongoing sell-off in Bitcoin ETFs comes as BTC trades below the ETF creation cost basis of $84,000, suggesting new ETF shares are being issued at a loss and placing pressure on fund flows.

Market observers say that the slump is unlikely to trigger further mass sell-offs in ETFs.

“My guess is vast majority of assets in spot BTC ETFs stay put regardless,” ETF analyst Nate Geraci wrote on X on Monday.

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Source: Nate Geraci

Thomas Restout, CEO of institutional liquidity provider B2C2, echoed the sentiment, noting that institutional ETF investors are generally resilient. Still, he hinted that a shift toward onchain trading may be underway.

Related: VistaShares launches Treasury ETF with options-based Bitcoin exposure

“The benefit of institutions coming in and buying ETFs is they’re far more resilient. They will sit on their views and positions for longer,” Restout said in a Rulematch Spot On podcast on Monday.

“I think the next level of transformation is institutions actually trading crypto, rather than just using securitized ETFs. We’re expecting the next wave of institutions to be the ones trading the underlying assets directly,” he noted.