The price of Optimism's native token, OP, has suffered a dramatic collapse, falling more than 22% in a single day amidst a broader market decline of just 2%. This sharp drop extends a brutal downtrend that has seen OP lose roughly 97% from its all-time high of $4.85, effectively erasing its entire bull market gains and pushing the token to new lows.
The primary catalyst for the latest plunge is a fundamental network shift. Base, a major Ethereum Layer 2 solution built on the OP Stack, announced it would be moving its operations away from the shared technology stack to consolidate on its own chain. This departure is a significant blow to Optimism, as Base was the main contributor to transaction activity and revenue for the OP Stack. The move calls into question the network's future utility and economic model.
On-chain and market data underscore the severity of the sell-off. Sell volume spiked over 157%, with approximately $187 million pushing the price down—the highest trading volume for OP in February. Capital flight was evident in futures markets, with over $7.5 million leaving exchanges, representing a 19% loss in 12 hours. While some spot traders bought and withdrew OP, net spot flow was positive for selling at $1.45 million. The liquidation of $1.28 million in long positions compared to only $80k in shorts further accelerated the decline.
Technical analysis paints a bleak picture. The price has invalidated a previously bullish inverted head-and-shoulders pattern and is breaking market structure by consistently making new lows without revisiting prior support levels. The Bull Bear Power indicator shows a resurgence of seller momentum. Analysts like Altcoin Sherpa have noted that while OP might see a bounce in a future bullish market cycle, it is unlikely to be a market leader, trading more like a "late-cycle loser" that has lost investor confidence.
