Optimism’s native token, the asset, has suffered a brutal downturn, plunging over 32% in the past 24 hours after weeks of sideways trading.

The abrupt selloff erased recent gains and sent shockwaves through the Layer 2 market, leaving traders scrambling to assess where the next key support might hold.

Technical Setup Suggests Retest After Heavy Breakdown

According to an analysis shared on X, the OP/USDT chart had shown encouraging signs just before the collapse. After rebounding by 4.16% earlier in the week, the coin traded in the $0.70–$0.72 range, with an identified support zone between $0.68 and $0.70. Analysts highlighted a potential Fair Value Gap (FVG) between $0.75–$0.78, anticipating a measured recovery if support held.

Source: X

However, as selling pressure intensified, the coin broke decisively below these levels, triggering a chain reaction of stop losses and forced liquidations. Indicators such as RSI and moving averages flipped bearish, confirming a short-term breakdown that wiped out the bullish setup. The next key level to watch is the $0.48–$0.50 support band, where traders expect a potential stabilization or relief bounce if volume begins to rebuild.

Price Data Confirms 32.9% Drop and Market Cap Compression

Fresh data from BraveNewCoin paints a stark picture of the current market state. Optimism is now priced at $0.48, marking a 32.90% decline in the past 24 hours, with a total market capitalization of $860.6 million. Trading volume surged to $574.96 million, reflecting the heavy activity and emotional exits driving the move. The circulating supply stands at 1.77 billion tokens, placing the token at rank #120 among global crypto assets.

Source: BraveNewCoin

This sharp contraction represents a major short-term correction in what had been a slowly improving market structure. The data shows the crypto slicing through multiple supports without meaningful rebound attempts, leaving the chart deeply oversold.

While fundamentals, including the Bedrock upgrade that reduced fees and improved throughput, remain constructive, the near-term outlook is dominated by technical weakness and supply-driven stress.

Leverage Flush Clears the Field for Potential Rebound

Market derivatives data confirms that the recent selloff was accompanied by a dramatic collapse in open interest to around $61.8 million, signaling widespread position liquidations. This pattern, a simultaneous drop in both price and open interest, typically indicates a leverage washout, which can precede a stabilization period as excessive speculation is cleared from the market.

Source: OpenInterest

Still, traders remain cautious due to upcoming token unlocks of 81 million tokens(1.89% of total supply), expected to introduce renewed selling pressure. Around 20% of the circulating supply is staked, earning between 3–5% annually, yet this yield has not been enough to offset dilution concerns. Unless the coin can reclaim the $0.68–$0.70 range with strong buying volume, sentiment may remain fragile and price vulnerable to another retest of $0.40.

In short, the crypto is facing a defining moment: its fundamentals are improving, but investor confidence will depend on how the token handles this critical support zone in the sessions ahead.