As the broader cryptocurrency market shifts towards a bearish trend, the total market capitalization, excluding Bitcoin (BTC), has experienced a significant drop of 5.66%, falling from $1.53 trillion to $1.43 trillion. Amid this market pullback, Arbitrum (ARB) is testing a crucial support level, with traders hoping for a potential reversal and comeback. However, the overall market correction signals the potential for further declines.
Arbitrum’s Crucial Support Level at $0.66
In the daily chart, Arbitrum’s price action is showing signs of struggling to maintain upward momentum. A local resistance trendline has kept bullish growth in check, and the formation of lower highs has brought ARB price to a critical support zone near $0.665. This support has previously triggered bullish reversals twice in the past month, making it a key area for traders to monitor.
Currently, Arbitrum is trading at $0.6870, with a 24-hour low of $0.6701, indicating a lower price rejection from the $0.665 support. The Relative Strength Index (RSI) is also showing a bullish divergence at the previous two price bottoms, raising the likelihood of a potential uptrend. However, the formation of a death cross between the 50 and 200-day Exponential Moving Averages (EMA) suggests the possibility of further bearish continuation.
Potential for Recovery Amid Growing Support
If the broader market stabilizes, Arbitrum could see a breakout rally. Trend-based Fibonacci levels suggest that a break above the resistance trendline could propel ARB toward the $1 psychological level. More optimistically, the price could reach up to $1.7984, the 100% Fibonacci level.
On the flip side, if the bearish pressure continues, Arbitrum could test deeper support levels at $0.62 or $0.4724. On-chain data, particularly the Global In-and-Out-of-the-Money indicator, reveals a strong demand zone between $0.62 and $0.65, with over 7 million ARB tokens held across 367 addresses.
Analyst Forecasts Potential 46% Upside
Crypto analyst Ali Martinez has highlighted a potential 46% swing for Arbitrum, citing a descending triangle pattern. A breakout rally could see ARB price retest its previous peak at $1.2404, marking a significant upside opportunity for traders willing to watch closely for a breakout.
#Arbitrum $ARB looks prime for a 46% upswing if it breaks out of this descending triangle! pic.twitter.com/V4dZ1a9hAo
— Ali (@ali_charts) January 21, 2025
In conclusion, Arbitrum’s price action is teetering on a crucial support level, with the potential for a bullish comeback contingent on broader market stabilization. A breach below $0.665 could accelerate the downside, testing deeper support zones.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.