Crypto market experienced a sharp decline on January 3rd, with most major cryptocurrencies falling. The leading digital currency Bitcoin took a significant hit, dropping by 6-7% to the $43,000 level. It is believed that this drop was a reaction to the potential rejection of the SPOT Bitcoin ETF by the US SEC. This concern was also highlighted recently by the digital financial services platform Matrixport.
Critical Formation in ARB
Despite this widespread sell-off, Ethereum Layer 2 scaling solution Arbitrum (ARB) showed extraordinary resistance by regaining and surpassing the critical $1.82 threshold. This level is not only a recovery point but could also indicate a breakout from a formation known as a rounded bottom, which is a reversal of a bullish trend.
ARB’s intraday trading volume was $2.47 billion, indicating a 110% increase. The recovery trajectory of Arbitrum’s price began at the end of October and started with its value returning from a low of $0.76. Since then, the token has shown an impressive 140% increase, reaching its current trading price of $1.85. According to information from DefiLlama, the total value locked (TVL) in the Arbitrum network reached a new record of $2.5 billion on Wednesday. This increase in TVL could indicate growing interest among investors and expectations of a significant recovery in 2024.
Price Analysis of ARB
The formation of a bullish reversal pattern amidst this rise is an indicator of persistent investor accumulation and strong potential for further gains. Despite the general market downturn on January 3rd that briefly brought ARB’s price down to $1.46, buyers quickly responded to this drop by pushing the price above the $1.82 threshold. Continuing above this level could confirm a rounded bottom breakout and early signs of trend recovery, making this move significant. Under the influence of this chart pattern, the ARB price could extend its recovery by 60%, reaching potential targets in the range of $2.91 to $3.
The current market sentiment looks positive for ARB, but a close below the $1.82 level could signal a delayed recovery due to sellers potentially initiating further price corrections. As Matrixport warned, this downside scenario could become more valid if the US SEC decides against the Bitcoin spot ETF. In such a case, ARB could find support at lower price levels, particularly around $1.47 and $1.25.
