The value of Arbitrum [ARB] continues to decline, currently priced at $0.72166, reflecting a 5.54% decrease in the last 24 hours.
The cryptocurrency’s dip below a crucial demand area indicates heightened selling pressure and increased uncertainty regarding its potential rebound.
Both technical signals and metrics on the blockchain point towards potential further drops unless there is a swift improvement in market conditions.
Given ARB’s struggle near important thresholds, the upcoming sessions hold significant importance.
Breaking Below Crucial Demand Spot Raises Alarm
Arbitrum has broken below a crucial demand spot, indicating escalated selling pressure in line with its downward trend since November.
The next probable support level is approximately at $0.65, while the resistance trendline in the long term remains unbroken.
This downward movement emphasizes the lack of substantial buying interest, potentially hastening additional declines.
Traders are keenly observing for any changes in momentum that could help stabilize the price at the current levels.
ARB Technical Indicators Displaying Bearish Signals
The technical indicators offer little optimism for ARB in the short run. The Relative Strength Index (RSI) is at 37.13, edging towards oversold territory, indicating heightened selling pressure.
Moreover, the Moving Average (MA) cross showcases a bearish trend, with the 9-day MA at $0.7682 and the 21-day MA at $0.8505.
These numbers suggest that ARB’s downward path might persist unless a surge in buying activity materializes promptly. Hence, technical indicators confirm the prevailing strong bearish momentum.
On-chain Metrics Indicate Decreasing Confidence
ARB’s on-chain metrics support the bearish outlook, reflecting diminished activity and interest. Net Network Growth has dropped by 0.98%, indicating slower adoption within the ecosystem.
The “In the Money” metric witnessed a decline of 0.22%, and Concentration decreased by 0.13%, signifying reduced investor involvement.
There was a considerable 14.73% drop in Large Transactions, further indicating lower institutional activity.
Additionally, the Price DAA Divergence is at 14.89%, displaying a substantial gap between user engagement and price performance, according to Santiment analytics.
These metrics point towards diminishing confidence in ARB’s short-term prospects.
ARB Market Sentiment Reflects Traders’ Uncertainty
The market sentiment mirrors the challenges, with open interest declining by 2.90% to $163.69 million.
This decrease underlines reduced trader involvement and fewer new positions being initiated, indicating reluctance to enter ARB at current levels.
Moreover, the absence of notable buying interest implies continued pressure on the cryptocurrency, making it susceptible to further declines unless sentiment witnesses a significant improvement.
Conclusion: Is a Further Downside More Likely?
Based on the technical and on-chain data, it appears more probable for ARB to witness additional downside in the near future.
Weak market sentiment, declining user engagement, and bearish technical signals make a recovery seem improbable without significant positive developments. Presently, the bearish trend seems set to continue.