If the bulls hold the range low, the Optimistic Sentiment [OP] could rally to the range high. If Bitcoin remains silent, the sellers are likely to take over again.

  • Sellers push OP lower, but bulls can defend range low at $1.302

  • Liquidity is located at $1.302 and $1.357 where a strong price reaction could occur

In the first week of September, Optimism [OP] was trapped in a narrow price range of $1.30 to $1.35. As of press time, Bitcoin [BTC] remains at the low of the range at $25,700, so the range could expand further.

Another price reversal, especially at the range low of $1.3, is likely to occur as whales take advantage of discounted prices to accumulate heavily.

Will sellers benefit from the range highs again?

During the first week of September, OP fluctuated between $1.3 and $1.35. At press time, the 50-EMA (exponential moving average) has edged lower towards the range high. This could make it more difficult for bulls to bypass this level, especially if Bitcoin’s weakness persists in the short term.

Therefore, another price rejection within the range could be imminent and a short opportunity could present itself. Initiating a short position at $1.34 and taking profit at the range low ($1.30) could provide a profit of 2.8% if such a rejection occurs at the range high.

However, the bearish setup will be invalidated if the candlestick closes above the range high near $1.35. But such a move could linger at $1.36 or the bearish order block (OB) of H4 at $1.37 to $1.38 (red).

Meanwhile, the relative strength index (RSI) is fluctuating within the low range of the first week of September, highlighting the volatility of buying pressure. The Chaikin Money Flow (CMF) is also struggling to break above zero, exacerbating the weakness of capital inflows.

Open interest stagnated

According to data from Coinglass, open interest has been declining since August but stagnated in the first week of September. This suggests that demand for OPs in the derivatives space fell in August but stagnated in September. It highlights a neutral sentiment.

Binance liquidation chart from Coinglass shows that key OP liquidity levels are $1.357 and $1.303. This means that after collecting liquidity at $1.303 (which coincides with the range low), there could be a strong reaction to the upside.

On the other hand, the price might reverse again at $1.357 which is close to the 50 SMA. Therefore, these two levels can serve as a good take profit and exit levels.