Arbitrum’s performance has been closely mirroring the overall cryptocurrency market trends, with a modest 1.2% increase in the past 24 hours following a rise in the global market cap.
Currently, the price of ARB stands at $0.558. Over the last week, Arbitrum has maintained a narrow trading range between $0.54 and $0.57, displaying limited price volatility.
On the daily chart, ARB has formed an ascending triangle pattern, encountering strong resistance at $0.62 despite establishing a sequence of higher lows.
Typically, this pattern signals a bullish trend, indicating a gradual strengthening by buyers.
Nevertheless, the prevailing momentum appears weak, raising concerns of potential resistance at $0.62 if buyer support wanes.
With the Relative Strength Index (RSI) line positioned below the signal line, a bearish momentum is evident, suggesting that sellers retain control, given the RSI level of 47.
Although the Chaikin Money Flow (CMF) remains positive, its decline indicates a lack of robust buying activity. If sellers intensify their actions, ARB could retest support levels around $0.48.
Amidst limited buying interest, multiple factors could influence the upward trajectory of Arbitrum.
Inactivity Among Whales
Data from IntoTheBlock highlights a considerable decrease in large transactions. Weekly large transactions have plummeted from over 200 to under 50, with volumes dropping from 342 million to 93 million.
Given whales’ significant impact on price dynamics through substantial trades, their current inactivity could lead to a period of sideways price action.
Decline in DeFi Activity
DeFiLlama data indicates a substantial drop in decentralized finance (DeFi) volumes on Arbitrum over recent weeks.
Starting at $813M, DeFi volumes on Arbitrum have dwindled to $279M, pointing towards reduced network utilization and diminishing confidence in the platform.
Evaluation of Arbitrum’s Liquidity Heatmap
The liquidity heatmap for Arbitrum reveals a concentration of liquidation levels below the current price, while scarcity exists above it. This setup indicates a prevailing bearish sentiment, with more short positions than long ones.
If the price were to rise, triggering short sellers to cover their positions, it might induce buying pressure. However, the prevailing bearish sentiment could challenge significant buying activities on the platform.
As per IntoTheBlock’s data, 91% of wallets are currently at a loss, with only 5% in profit. Continual losses might lead these holders to opt for position closures to mitigate further financial setbacks.