Arbitrum [ARB] was observed trading within a traditional descending triangle formation, a pattern commonly linked with potential breakout chances.
Market analysts are indicating that a breakout could trigger a significant 46% increase in price, shining a spotlight on ARB’s upcoming movements. With the current price consolidation close to crucial support levels, traders are keenly observing for pivotal price responses.
As of the time of writing, ARB was priced at $0.7066, with a daily trading volume of $606,785,204, marking a 3.51% decrease within the previous day.
Over the last seven days, ARB has experienced a decline of 3.24%, while its market capitalization is presently standing at $3.05 billion, with a circulating supply of 4.3 billion ARB tokens.
Crucial Levels of Support and Resistance
Analysis of the ARB/USDT chart indicates the existence of bearish pressure, as the price consolidates near the significant $0.6890 support level crucial for market stability.
A failure to sustain above this level may lead to a downward price movement, potentially testing the psychological support level of $0.6500.
The immediate resistance level is identified at $0.78, where price movements have consistently been rejected by the descending trendline on multiple occasions.
If ARB attempts to move upwards, Fibonacci retracement levels at $0.8661 (0.618) and $0.9077 (0.786) are anticipated to pose as key barriers.
Market analysts suggest that a decisive breakthrough above these levels could open the path for an upward trend towards $1.0690 or higher.
Indicators Point Towards Bearish Sentiment
Technical indicators are currently aligning with a short-term bearish perspective. ARB’s Ichimoku Cloud analysis indicates that the price is below the cloud, indicating an overarching bearish momentum.
Moreover, the Tenkan-sen line ($0.7426) and Kijun-sen line ($0.8032) are serving as notable resistance levels.
The Relative Strength Index (RSI) is positioned at 40.57, slightly above the oversold territory, indicating weakened momentum. Despite this, there are no signs of bullish divergence, implying that sellers maintain dominance.
The lack of significant volume activity further underscores the absence of buying interest, making the next price movement highly contingent on ARB’s ability to retake the $0.74 level.
On-chain Metrics Point to Decreased Participation
On-chain data sourced from IntoTheBlock is indicating a bearish sentiment, with all four metrics showing negative trends.
The Net Network Growth at -1.10% reflects reduced activity from new participants, while the “In the Money” metric at -2.09% signifies a decline in profitable wallet addresses.
Large transaction activity remains subdued, with 234 transactions recorded in the past 24 hours, down from a 7-day peak of 238.
Analysts attribute this decline to a lack of interest from high-value investors, which aligns with the price stagnation close to the $0.50 mark.
Traders Anticipate a Potential Upward Movement
Despite the prevailing bearish indicators, market analysts retain optimism regarding a probable breakout from the descending triangle pattern.
Rose Premium Signals have outlined upside targets at $1.0690, $1.3053, and $1.5804 if ARB manages to surpass the trendline.
As ARB consolidates its position near the support level, the forthcoming move could set the tone for its medium-term trajectory, with traders closely monitoring for a potential breakout opportunity.