With a noticeable downtrend since May 2024, Arbitrum's ARB token may face a significant correction below the critical $0.3 threshold. Investors should remain vigilant amid this challenging scenario.
Cryptocurrency investors should pay close attention to the current Arbitrum (ARB) situation, which could see a significant decline in the coming weeks. Despite a 140% increase in November-December 2024 in the overall cryptocurrency market, the ARB token has failed to break out of its long-term bearish trend.
Analysis of the weekly ARB chart shows that the Arbitrum market structure has been bearish since March 2024. This trend has also been evident in the daily chart, where a drop below the $0.3 support level could lead to a deep correction.
Although the monthly unlocking of $92.63 million ARB in June represented 0.93% of the total supply, the selling pressure has not weakened. Furthermore, the fact that the May low has not been breached has reinforced the bearish nature of the token.
On the daily chart, a bearish structure has been observed for the past month. Despite Bitcoin holding above $100,000, Arbitrum has recently experienced a 28% drop, which is concerning.
If the price falls below the 78.6% Fibonacci retracement level at $0.298, a decline to the $0.18 level is likely. However, the $0.265 to $0.28 range could act as a demand zone along the way.
The 3-day Stochastic RSI is approaching the oversold zone. However, ARB will need to face the 200-day moving average, and more importantly, a Point of Control (POC) and liquidity wall at $0.51 in case of a bullish reversal.
In other words, it might be wiser to consider a crypto that has demonstrated relative strength in recent times and wait for ARB to surpass this major threshold before diving in.
In conclusion, the current volatility of Arbitrum is putting investors on alert. It is essential for market participants to closely monitor the situation and prepare for any eventualities. In this uncertain environment, cryptocurrency investors are advised to diversify their portfolios and closely follow market trends to make informed decisions.
Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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