With the explosion of Arbitrum (ARB) last week, things started to heat up for altcoins, especially Layer 2 tokens. With the decline in Bitcoin dominance and capital rotation, the altcoin market may start to move, according to analysts.
Falling BTC.D breathed the altcoin market
A drop in Bitcoin dominance signals a shift of capital from BTC to other altcoins. In a way, it refers to the return of capital, i.e. profit, to other riskier assets. Therefore, the chart below shows a slow rise in altcoin dominance.
In addition to the increase in altcoin dominance, investors should note that profits from Arbitrum have a high potential to translate into other top Tier 2 tokens such as Optimism and MATIC. Therefore, the next section may benefit the price of Optimism (OP).
Optimism signals after Arbitrum (ARB)
Optimism (OP) price is struggling to overcome a resistance near $2.73 and it looks ready for a breakout. A firm close above $2.73 could clear the way for the OP to recover towards the next hurdle at the 61.8% Fibonacci retracement level at $3.21, where the altcoin formed a local top in February 2023.
Breaking the $3.21 resistance leads the OP price to the next critical level at $4.11, according to technical analysis. Altogether, this move would represent a 51% gain from the current position at $2.70.
A daily candlestick closing below the $2.18 level will make a lower low (LL) and invalidate the bullish argument for OP price. In such a case, the OP could slide lower and visit the $1.76 support base, according to analyst Akash Girimath.
Optimism network succumbs to hack attack
cryptocoin.com As we reported, Hundred Finance, a DeFi protocol on the Optimism network, has been hacked. Despite the large funds stolen after the attack, the Optimism protocol and OP price remained largely unscathed.
According to data provided by blockchain security firm PeckShield, the hacker’s strategy was to donate large sums of Wrapped Bitcoin (WBTC) to manipulate the price of another cryptocurrency called Hundred Finance Wrapped Bitcoin (hWBTC).
Hundred Finance used Twitter to inform its users about the recent attack on their platform. In their last tweet on April 16, they mentioned that they were trying to start a dialogue with the hacker to reach an agreement.
These attacks had a serious impact on the state of the Hundred Finance protocol. According to data from Dapp Radar, the volume and overall transactions on the network have decreased.
How has optimism been affected?
Data from Santiment showed a decline in positive opinion of the Optimism protocol over the past few days. This indicates that the crypto community’s overall outlook towards Optimism is becoming more skeptical.
In terms of price, the OP has seen a significant price increase of 21.78% since April 12. At the time of writing, it is trading at $2.66, which has gained 2.5% over the last 24 hours.
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