Arbitrum (ARB) price is trading with a bullish bias, but continues to consolidate within a range. The upside potential for the Ethereum Layer 2 (L2) token could be reinvigorated once ETH price nicks the $4,000 (approximately R74,720) psychological level, with ARB likely to benefit from the ensuing liquidity overflows into ETH betas. Arbitrum price eyes a 12% explosion.
Arbitrum (ARB) price is confronting immediate resistance due to the $2.2017 (approximately R41.14) blockade, which marks the top of a market range from $1.7307 (approximately R32.34). With strong support downward due to the 50-day Simple Moving Average (SMA) at $1.8989 (approximately R35.49), ARB price could shatter the $2.2017 (approximately R41.14) roadblock, clearing the path for an extension north. A flip of the $2.2017 (approximately R41.14) resistance level into support would set the tone for Arbitrum price to extend to the $2.4250 (approximately R45.32) peak, levels last tested on January 11. Such a move would constitute a 12% climb above current levels.
In a highly bullish case, Arbitrum price could clear this range high to set another local top at the $2.6000 (approximately R48.57) psychological level.
Notice the ascending Relative Strength Index (RSI), which is evidence of rising momentum. The volume indicators are also bullish, showing a strengthening trend. These add credence to the bullish thesis.
On-chain metrics supporting Arbitrum price bullish thesis:
To start with, the social dominance and social volume metrics are dropping, which is bullish because it means the ARB project is not overhyped. When there is too much hype around a project, the price tends to go the other way. Also, the number of daily active addresses created for ARB, effectively pointing to crowd interaction, has increased, as has the development activity on the network. With more addresses being involved in ARB, coupled with network-related progresses, this metric is a bullish catalyst for the L2 token. The whale transaction count metric for transactions exceeding $100,000 (approximately R1.87 million) has also shown significant spikes over the last few months. This, coupled with the growth in volume, is a bullish fundamental.
On the flip side, if traders begin to cash out on the gains made so far, the Arbitrum price could descend, first losing the support due to the 50-day SMA at $1.8989 (approximately R35.49). An extended fall could send ARB price to the $1.7307 (approximately R32.34) support, below which the ARB price would create a lower low under the 200-day SMA at $1.6867 (approximately R31.54). This would invalidate the bullish thesis.
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