Arbitrum (ARB) has seen a significant price drop below $1, reaching $0.94, marking a 56.90% decrease in the past 90 days. Despite this, data on-chain and from a technical perspective suggest that ARB may recover some of these losses in the near future. One bullish indicator is the increased activity of whales, who hold large amounts of the token and have been accumulating more since June 5. This accumulation by whale addresses, as shown by Santiment, points towards a potential price increase for ARB.
Previously, ARB had flashed a buy signal, but the timing was off, and the bullish bias could not be confirmed. However, with the high concentration of ARB among large holders, including the fact that 88% of holders are currently losing money, the potential for a price rebound is stronger. The technical analysis shows that the Money Flow Index (MFI) is at 12.69, indicating an oversold condition for ARB. Additionally, the Relative Strength Index (RSI) aligns with this prediction, with a reading of 33.21, suggesting an oversold region for ARB.
If the buying pressure continues and the selling pressure decreases, ARB may reach the resistance level at $1.12 in the short term. However, a resurgence in selling pressure could push ARB below $0.90. Another factor to consider is the correlation between ETH and ARB, as Arbitrum operates on the Ethereum blockchain. If ETH’s price increases, ARB may follow suit, but a decline in ETH’s value could affect ARB negatively.
In conclusion, while ARB currently faces challenges with a significant price drop, there are indications that a rebound may be on the horizon. The increased accumulation by whales, along with oversold conditions indicated by technical analysis, suggest that ARB’s price may see an uptick in the near future. However, as with any investment, it is important to conduct thorough research and consult with a professional before making any financial decisions.
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