Arbitrum (ARB) maintained its strong stance despite the Bitcoin downturn. As of Wednesday, Arbitrum, one of the best performers in the market, continues its path by overcoming the broader market crash caused by the Bitcoin (BTC) price drop. The Ethereum-based Layer-2 token showed strength by staying away from panic sales despite news in January that the US Securities and Exchange Commission (SEC) would reject spot BTC exchange-traded funds (ETFs).
Arbitrum Coin Commentary
Arbitrum (ARB) saw a 10% increase in price during the first hours of the New York trading session. During this period, there was also a 130% increase in trading volume. This situation indicates that investors’ interest in ARB tokens has increased despite the decline in Bitcoin prices.
Good news also came from Arbitrum’s Total Value Locked (TVL), which reached its highest level in the last seven months at 2.439 billion dollars, supporting this outlook. The increase in TVL may indicate growing liquidity within the protocol, rising popularity, and ease of use.
Moreover, looking at another aspect of Arbitrum’s price, after a rise that began in October 2023 and culminated in a 160% increase, technicals now suggest a possible pause, with discussions about the price potentially reaching its peak soon.
The Future of Arbitrum Coin
Following an incredible 160% price movement, a technical formation emerged in Arbitrum, resembling a “U” shape on the chart, which could indicate a reversal of a long-term price movement. Generally, such patterns could mean a reversal in a long-term price trend.
The Relative Strength Index (RSI) at a level of 81 indicates that ARB has recently been substantially overbought, suggesting a possible pullback. This momentum indicator, combined with the implied deviation at 35 on the Average Directional Index (ADX), shows that the bulls may be approaching a point of exhaustion.
Consequently, it can be noted that a daily candlestick closing below the support level of $1.8225 could trigger profit-taking and potentially pull the Arbitrum price back to the $1.4676 level.
In one of the worst-case scenarios, the decline could force the token’s price to close around $1.4 or below the psychological support level of $1.2.
Will Arbitrum Decline?
According to data from the Global In/Out of the Money (GIOM) metric, following a potential decline in Arbitrum’s price, there is a support range between $1.35 and $1.64 where approximately 131,720 addresses have purchased at an average price of $1.43, holding 2.77 billion ARB. This region has recently attracted investors buying the dip. The ensuing buying pressure could indicate an upward movement in Arbitrum’s price, potentially returning to the highest level of the $2.0272 range before reaching the psychological level of $2.2.
A potential daily candlestick closure at this mentioned level could invalidate the likelihood of a downturn and pave the way for a move towards the $2.4 psychological level. Such a move could represent a 20% increase from the current trading level of ARB.
