Can Optimism crypto extend its recovery? THESE signals offer clues

Optimism [OP] sees a bullish rebound following a price decline on the 7th of October that saw the asset fall roughly 12%. The pullback coincided with declining on-chain performance, Total Value Locked (TVL), and DEX volume.

However, off-chain market activity has driven the recent 11% price surge, as capital inflows and market positioning support the potential for further price gains in the near term.

OP’s derivatives market points to further gains

The perpetual market position remains strongly bullish, with Open Interest (OI) and the Funding Rate being the key indicators suggesting this.

OI in itself does not necessarily imply a bullish or bearish position in the market, but measures capital in the perpetual market.

In the past 24 hours, Optimism‘s OI surged significantly, reaching a high of roughly $107.82 million following a 17.25% increase as of writing, confirming an inflow of $18.98 million.

In addition to this, there has been a positive Funding Rate reading of 0.0096%. The Funding Rate measures whether long or short positions are dominating the capital positions in the perpetual market.

When positive, it indicates that the bulls are in more control, with more long positions than short positions in the market. These conditions suggest there is a chance that the price will still move higher in the near term.