Arbitrum (ARB) Price Approaches Critical Resistance, Is a Breakout Happening?
The price of Arbitrum (ARB) has reached a crucial resistance area, and a breakout could lead to a significant surge. However, it is possible that it might face rejection as it trades within a bearish pattern.
Recently, Arbitrum DAO approved the allocation of 50 million ARB to various projects operating within its ecosystem. This move has boosted investor sentiment towards ARB and tokens within its ecosystem.
Daily Outlook
The price of Arbitrum (ARB) dropped below a descending resistance trendline since reaching a local high of $1.35 on July 17th. This move caused to fall below a critical support area at $0.92, reaching its lowest point at $0.75 on September 11th.
The price of ARB has since rebounded and formed a bullish structure. Currently, it is testing the $0.92 resistance level. The bears is likely to defend this area actively because it coincides with the descending resistance trendline.
The daily RSI indicator has broken above its descending resistance trendline and is above 50, indicating that the bulls are attempting a comeback.
Therefore, the ARB price could adjust to the $0.8 support level, a key level in the recent uptrend, before making another breakout attempt.
Descending Pattern
The 2-hour chart shows the recovery from the $0.75 low contained within an ascending parallel channel. This is a descending pattern, which often leads to a breakdown in the most cases.
The 2-hour RSI indicator has formed a bearish divergence. This occurs when the price rises but the momentum decreases and is often followed by a decline.
Hence, the ARB price could decline to the channel support at $0.84.
Conclusion
The most likely scenario suggests that the ARB price might undergo a correction in the coming days. The nearest target is $0.84, and it could drop further to $0.80.
After the correction is complete, the ARB price is likely to make another breakout attempt above the $0.92 resistance level.
Disclaimer: Please note that this article is for informational purposes only and should not be taken as investment advice. As an investor, it is important to do your own research before making any decisions. We are not responsible for any investment decisions you make based on this information. Not Financial Advice.
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