OP, the native token of the Optimism network, jumped 9.56% on Tuesday to hit $0.15, extending its recent gains. The move comes as what traders call “smart money” positions point to a short-term price target of $0.18 within the next seven days. But the rally has pushed a key technical indicator into overbought territory, raising the possibility of a sharp reversal.
Why the rally has legs — for now
The bullish case for OP rests on concentrated buying by investors who typically move before the crowd. Their positioning suggests the token could add another 20% from current levels, reaching $0.18 by early next week. That kind of coordinated accumulation often precedes a breakout, but it doesn't guarantee one. The token's relative strength index, or RSI, now sits at 71.53. Readings above 70 are considered overbought, meaning the asset has risen too far, too fast and is due for a correction.
Overbought warning and the $0.12 safety net
When an RSI climbs above 70, traders start looking for exit points. For OP, that could mean a 30% drop back to the $0.12 support level — the zone where buyers stepped in during previous pullbacks. A move to $0.12 would erase most of the gains from the current rally. The risk is real: overbought conditions don't always trigger immediate sell-offs, but they do increase the probability of one. The token's price action in the coming sessions will determine whether the smart money target holds or the bears take control.
What traders are watching next
The next few days are critical. If OP can hold above $0.14 and the RSI starts to cool without a sharp price drop, the path to $0.18 remains open. A break below $0.14, on the other hand, would likely accelerate selling toward $0.12. No official catalyst has been announced, so the move appears purely technical and sentiment-driven. Traders are now watching for volume confirmation — a sustained increase in trading activity would lend credibility to the $0.18 target. Without it, the overbought signal could become a self-fulfilling prophecy.
