- Optimism price has slipped vt 27% from the year-to-date high.
- Revenue in the ecosystem has fallen by 31% in the past 30 days.
- Competition from Arbitrum and Polygon is soaring.
Optimism crypto price pulled back amid rising competition in the layer-2 industry. OP has dropped in the past three straight days to $2.3990, which was lower than the weekend high of $2.58. It has declined by more than 27% from its highest level this year.
Layer-2 competition heats up
The blockchain industry is evolving at a significantly faster pace. One of the fastest areas in the industry is layer-2, which is a sub-sector that seeks to address the most pressing challenges in traditional sectors.
Layer-2 networks seek to improve the most pressing challenges that exist in the blockchain industry. They do this by maintaining the security and reliability of existing platforms like Ethereum. At the same time, improve the speed of transactions and lower costs.
Polygon was one of the earlier layer-2 networks. Today, MATIC, its token, is the biggest layer-2 networks in terms of market cap. It has a combined market cap of over $7 billion.
Read more: How to invest in Polygon.
Optimism is another popular layer-2 network that helps people to save costs and boost their productivity when interacting with dApps. Other large players in the industry are Arbitrum, Immutable X, and Loopring among others.
Optimism’s OP price has retreated in the past few days amid rising concerns about competition. Data compiled by DeFi Llama shows that the network has been used to build 107 DeFi applications. They all have a total market cap of over $963 million.
In the past 30 days, the TVL in this ecosystem has jumped by 25%. The number of active developers in the ecosystem has risen by over 40% in the past 30 days while code commits have dropped by 3%. Revenue in the ecosystem has dropped by 31% to $326k in the past 30 days.
A likely reason why OP is falling is that Polygon and Arbitrum are becoming increasingly competitive. Arbitrum’s TVL has jumped by 42% in the past 30 days to $1.4 billion. This makes it the fourth-biggest player in DeFi. It has even overtaken Polygon, which has a TVL of $1.12 billion.
Optimism crypto price prediction
The 4H chart shows that the Optmism price has been in a bearish trend in the past few days. It has managed to move below the 25-day and 50-day exponential moving averages. It is also hovering slightly above the important support level at $2.34, the lowest point on February 22.
The token is approaching the ultimate support of the Murrey Math Lines. Therefore, OP price will likely have a bearish breakout, as sellers target the key support at $2.25.
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