Arbitrum faces drop in demand even as prices surf above $1.2
Since $1.3 is a strong resistance zone for Arbitrum, a retracement to the $1.16 level before another rally was a possible scenario in the coming days.
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Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
The short-term price action and sentiment of ARB were bearish.
This showed further retracement to $1.16 was possible but does not indicate a downtrend below $1.1 or $1 was ready to begin.
Arbitrum [ARB] has witnessed steady growth in the months since the token’s airdrop. In terms of liquidity flow, the protocol saw increased inflows which was a strong sign of the rise in interest in the project. The launch of ZepetoX [ZTX] could heighten this interest.
Read Arbitrum’s [ARB] Price Prediction 2023-24
The price charts showed that the past six weeks were positive after the losses ARB faced in late May. The recent gains saw ARB establish a bullish structure on the 1-day timeframe and the move to $1.3 was an important development.
The lower timeframe ARB charts were not as firmly bullish
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The 4-hour chart showed that the market structure was bearish as ARB slumped beneath the higher low at $1.234. The momentum was also on the verge of flipping bearish as the RSI teetered just beneath the neutral 50 level.
The OBV has failed to post gains after 14 July as well. Instead, it faced a sharp decline on 18 July, which showed that market participants did not possess bullish convictions in the market. However, this could begin to change.
The $1.3 zone is critically important. It had served as support in late April and acted as resistance over the past week. The sellers are strong in that region but it was possible that ARB buyers could push prices higher once more after a retracement.
The Fibonacci retracement levels showed that the $1.23, $1.2 and $1.16 levels would act as support should ARB prices descend further. Yet, until they are all defeated, the bullish bias would remain.
How much are 1, 10, or 100 ARB worth today?
The declining buyer strength in the spot markets aided the bearish argument
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The Open Interest has slid lower alongside prices over the past 24 hours. This showed discouraged bulls in the futures market and highlighted bearish sentiment. The spot CVD was also in a downtrend.
While the funding rate remained positive, the short-term show bears had an advantage. It remains to be seen if the bulls can initiate another rally or if the bears will seize control again.
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