Price dynamics, RSI readings and wave analysis indicate that the trend on ARB is bearish. All this confirms the likelihood of a bearish breakout and a continuation of the decline.
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Arbitrum price is facing a sharp decline
According to technical analysis of the daily chart, ARB, the Arbitrum project coin, broke through the $1.25 horizontal area on July 16. At that moment, it seemed like a bullish breakout and the beginning of a new upward movement.
But hopes were not realized. Shortly after the breakdown, the ARB price pulled back below this area. This suggests that the breakout was only a price deviation (red circle). Such a bearish development is often followed by a decline.
The bearish bias was further reinforced when the ARB price fell below the support line of the ascending parallel channel on July 24th. These price patterns are usually associated with corrective movements. Accordingly, a bearish breakout from it is another confirmation of the bearish trend.
A bearish breakout from it is another confirmation of the bearish trend.
Source: TradingView
Finally, the daily RSI is also giving bearish signals. This momentum indicator is now declining and is below the 50 mark (red icon). All of these are considered to be signs of a bearish trend.
ARB Forecast: a renewal of the yearly low is possible
Meanwhile, the wave analysis of the shorter 6-hour timeframe also supports the bearish signals of the daily chart.
The wave chart demonstrates a completed A-B-C corrective structure. This is evident due to the overlap (white line) of waves A and C and the presence of an ascending parallel channel. A solid close below the channel support line will confirm the bearish breakout and the validity of this analysis.
Although the nearest support area is at $1.05, wave analysis suggests that the ARB price is expected to fall to a yearly low of $0.90.
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Source: TradingView
Despite this bearish outlook, a rise in ARB above the wave C high at $1.35 (red line) would indicate that the trend remains bullish.
In this case, price could reach the next long-term resistance at $1.65.