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Arbitrum (ARB), the Layer 2 scaling solution, has suffered a dramatic price plunge, losing over 30% of its value in the past 24 hours. This steep decline is directly linked to the broader cryptocurrency market downturn, with Bitcoin (BTC) and Ethereum (ETH) also experiencing significant losses.
As of writing, ARB is trading at a record low of $0.44, a stark contrast to its previous performance. The token’s daily trading volume, however, has surged by 151% to $589 million, a peculiar discrepancy that often signals intense selling pressure. This negative divergence is a strong bearish indicator, suggesting that many investors are rushing to offload their ARB holdings.
The turmoil extends to Arbitrum’s derivatives market. While trading volume has skyrocketed by over 200%, open interest has plummeted by 30%, indicating a mass exodus of traders seeking to minimize losses. Coinglass data reveals that ARB‘s futures open interest is at its lowest point since October 2023, standing at $109 million.
Moreover, the price crash has triggered a wave of long liquidations, with $2.01 million in ARB positions liquidated in the past day. This is the highest daily liquidation figure since June 7. As long positions are forcibly closed due to price declines, it exacerbates the downward pressure on the token.
Also Read: Kwenta and Perennial Kickstart Arbitrum Expansion with 1.9M ARB
Technical indicators offer a glimmer of hope for potential recovery. The Relative Strength Index (RSI) and Money Flow Index (MFI) are both deeply oversold, suggesting a possible rebound. However, the Chaikin Money Flow (CMF) is firmly negative at -0.20, indicating strong capital outflow and a potential continuation of the downtrend.
While a short-term rebound cannot be entirely ruled out, the overall bearish sentiment and heavy selling pressure suggest that ARB’s price may face further challenges before finding a stable footing.
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.
I’m your translator between the financial Old World and the new frontier of crypto. After a career demystifying economics and markets, I enjoy elucidating crypto – from investment risks to earth-shaking potential. Let’s explore!
