📊 Optimism (#OP ) Holders to Face Another Heart Ache as TVL Slides to 20-Month Low

Optimism (OP), the Layer-2 network built on Ethereum, has been unable to live up to its name. Its native token, OP, launched in May 2022 and offered market participants a glimmer of hope, especially with the significant airdrop distribution to early adopters.

Today, OP is a shadow of itself, falling from a peak of 4.85 five months ago to a nine-month low of $1.27. But that’s not all.

🔸 Investor Exodus Hits #Optimism

In crypto, market participants view a massive correction as an opportunity to buy at discount prices. However, according to IntoTheBlock, this is not the case for $OP .

Data from the blockchain analytics platform reveals a staggering 694% seven-day increase in the large holders’ netflow to exchange netflow. This metric tracks the rate at which stakeholders who own a large amount of cryptocurrency send them to exchange.

When this figure decreases, it means these large investors do not plan to sell, thereby providing an avenue for price stability or increase. However, a spike in the netflow points to preparedness to sell.

Optimism Large Holders Netflow to Exchange Netflow Ratio.

Since it is from large investors, it could put downward pressure on the price, which is the situation with OP. The growth in this metric points to decreasing confidence in the token’s short to long-term potential.

However, native cryptocurrency is not the only part of Optimism’s ecosystem experiencing difficulty. According to DeFiLlama, Optimism’s Total Value Locked (TVL) had nosedived to $565.08 million — a value it last reached in January 2023. This same metric was worth over $1 billion when OP price reached its all-time high.

TVL, or Total Value Locked, measures the total value of assets staked or locked in a protocol. A higher TVL suggests increased trust and liquidity in the protocols under a chain. When TVL decreases, the network’s health is at risk as participants lose trust in the chain’s ability to generate good yields.