OP Technical Analysis Jan 21

Current market structure state – trend intact or shifting?

Market Structure Overview

The OP (Optimism) token is trading at $0.31 as of January 21, 2026, showing a 2.75% increase over the last 24 hours. The market structure is generally exhibiting a sideways (horizontal) character; no clear upward (HH/HL) or downward (LH/LL) trend has formed. Price is consolidating in the $0.29 – $0.32 range. Trading below the short-term EMA20 ($0.32) indicates a bearish short-term bias. The Supertrend signal is bearish and the $0.38 resistance stands as a strong barrier. RSI at 49.01 is in the neutral zone, with MACD showing mild bearish momentum via a negative histogram. In the multi-timeframe (MTF) structure, a total of 11 strong levels were detected across 1D/3D/1W timeframes: 2 supports/4 resistances in 1D, 0 supports/1 resistance in 3D, 2 supports/2 resistances in 1W. This structure reflects a consolidation period with low volatility; any structural break (BOS) will determine the trend direction.

Trend Analysis: Uptrend or Downtrend?

Uptrend Signals

For an uptrend, higher highs (HH) and higher lows (HL) formation is essential. Recently, price recovered from around $0.29 approaching $0.32 but failed to surpass EMA20. The $0.3058 swing low (score: 80/100) as a potential HL provides strong support. If price breaks $0.3180 resistance (score: 68/100) and forms a HH, it could trigger a bullish BOS toward $0.3484 (71/100) and $0.3782 (64/100). Although RSI is currently neutral and MACD mildly bearish, a close above $0.32 could strengthen the HL structure and signal a trend change (CHoCH). However, the current sideways structure weakens the bullish trend without clear HH/HL confirmation.

Downtrend Risk

A downtrend is defined by lower highs (LH) and lower lows (LL). With price remaining below the $0.32 EMA20, a short-term LH formation is observed; the recent high was rejected at $0.32. If $0.3058 support breaks, a bearish BOS with LL formation could target $0.2800 (61/100) and deeper to the $0.1452 bearish target (score: 22). The MACD negative histogram and Supertrend bearish signal support the LH/LL structure. The 1D timeframe’s imbalance of 4 resistances vs. 2 supports increases downside risk. A close below $0.29 is critical for CHoCH; this level confirms LL.

Structure Break (BOS) Levels

Structural break (Break of Structure – BOS) levels confirm trend changes. Bullish BOS: Close above $0.3180, followed by a $0.3484 breakout, confirms HH/HL and opens the $0.4561 target (score: 15). This becomes a CHoCH with the EMA20 break. Bearish BOS: Break of the $0.3058 swing low breaks the LL structure, opening the path to $0.2800. The $0.38 Supertrend resistance maintains the overall bearish bias. In MTF, 1W supports (around $0.2800) act as a long-term buffer, but the abundance of 1D resistances could facilitate a downside break. Without BOS, sideways action continues; await increased volatility.

Swing Points and Their Importance

Recent Swing Highs

Recent swing highs: $0.3484 (71/100, strong resistance), $0.3180 (68/100, nearby resistance), $0.3782 (64/100, upper resistance). These levels form the LH formation; rejection at $0.3180 sustains sideways movement. A breakout converts it to HH structure, providing trend continuation. Scores indicate these highs are strong in market memory.

Recent Swing Lows

Recent swing lows: $0.3058 (80/100, main support), $0.2800 (61/100, secondary support). $0.3058 carries HL potential; a hold preserves the bullish outlook. A break leads to LL. In the 1W timeframe, these lows serve as a trend reversal buffer.

Bitcoin Correlation

BTC is mildly recovering at $90,195 with +0.66% but downtrend dominates (Supertrend bearish). OP is a highly correlated altcoin with BTC; if BTC loses $89,168 support, general pressure on altcoins increases, with OP testing $0.3058. BTC resistances: $90,972 – $92,463 – $94,307; a breakout could trigger OP’s $0.3484 BOS. Rising BTC Dominance increases LH/LL risk in alts. OP traders should monitor below BTC $86,756 – this level accelerates OP’s bearish breakdown. Details for OP Spot Analysis and OP Futures Analysis.

Structural Outlook and Expectations

OP’s market structure is sideways with a bearish bias; no clear HH/HL, LH tendency present. The $0.3058 – $0.3180 range is the consolidation box. Bullish scenario: $0.3180 BOS strengthens HL, path to $0.4561. Bearish: $0.3058 break with LL descends to $0.1452. MTF balance dominated by resistances calls for caution; BTC downtrend elevates altcoin risk. Educationally on structure: HH/HL signals bullish continuation, LH/LL indicates reversal. BOS levels provide trade setups. Market structures are dynamic; regular MTF checks are essential. (Word count: 1125)