The Arbitrum exchange rate (ARB) is at an important crossroads. The price risks falling below a significant support area, which could trigger a sharp drop
The above-mentioned support is formed by the support line of the long-term ascending parallel channel and the important Fibo level.
The direction of the further trend may depend on whether the ARB rebounds from this area or makes a bearish break through it.
ARB is on the verge of a bearish breakout
The ARB token is the native token of the Arbitrum project, which is a Level 2 (L2) blockchain.
The long-term daily timeframe shows a clear bearish picture for the coin, as shown by the results of the technical analysis. This is primarily due to the presence of an ascending parallel channel on the chart.
This pattern is considered a corrective pattern, so its northward direction implies that the broader trend in the currency is bearish and the price will eventually break out of it to the south.
In addition, the ARB is trading in the lower part of this channel, which further increases the probability of a bearish breakout.
Fibonacci levels are traditionally thought to be the most plausible stopping and reversal points after a major advance in any one direction.. At those levels, the market is expected to regain some of the distance covered and only then resume the move in the original direction.
ARB Prognosis: growth is possible
Despite the bearish signals of the daily timeframe, the shorter-term 4-hour chart looks more optimistic. Here, the price formed a double base, which is considered a bullish pattern and usually causes the price to rise.
In addition, this bullish pattern is supported by the RSI divergence signal (green line).
In addition, this bullish pattern is supported by a bullish RSI divergence signal (green line).
We can talk about bullish divergence when the decline in price is not accompanied by a decline in momentum.
Accordingly, there are reasons to be bullish about ARB.
In case the market may target the Fibo level of 0.618 of correction at $1.60. Here also passes the midline of the long-term channel.
The market behavior in this area can be decisive in determining the further direction of the trend.
If ARB breaks above $1.60, it could reach an all-time high of $1.80.
Meanwhile, a bearish break of the support line of the channel can provoke a sharp fall towards the Fibo level of 0.618 of correction at $1.0.
As BeInCrypto’s editorial staff told earlier, Arbitrum has overtaken the bitcoin network in terms of transaction fees.