Arbitrum (ARB) Price Rebounds After 80% Decline — Resistance Breakout Key to Reversal

  Key Takeaways

• Arbitrum (ARB) has recovered since its all-time low in August.
• The ARB price broke out from a short-term parallel channel.
• After an 80% decline, has the Arbitrum price finally bottomed?

While Arbitrum started 2024 on a positive note, reaching a new all-time high price in January, its correcting has been much steeper than the rest of the market. In August, ARB fell to a new all-time low, marking the end of its 80% decline.

Since breaking out from its consolidating pattern last week, the ARB price has created several higher lows. Has ARB finally started its bullish trend reversal, or is this a relief rally? Let’s find out.

ARB Creates Bottom

The ARB price has declined since its all-time high of $2.40 in January. The downward movement led to a new all-time low of $0.43 in August, a decrease of 82% in 210 days. During the decline, ARB broke down below the $1 horizontal area, which is now likely to act as resistance.

Despite its drastic fall, the ARB price has shown signs of a bullish trend reversal since its all-time low. Specifically, ARB created two higher lows, which are considered the first signs of a bullish structure.

In the first week of November, the Arbitrum price created a bullish, engulfing candlestick (white icon).

Well-known trader Andrew Kang also believes  that ARB has finally bottomed.

Technical indicators are bullish. The Relative Strength Index (RSI) created a bullish divergence (green) and is approaching 50. The Moving Average Convergence/Divergence (MACD) made a bullish cross (black circle) and is nearly positive.

So, the weekly time frame readings suggest ARB will reach the $1 horizontal resistance area.

What’s Next?

The daily time frame ARB analysis supports the possibility of a bottom. It shows the ARB price has broken out from an ascending parallel channel and is validating it as support (white icon). According to the daily time frame, ARB only faces a resistance at $0.80 before increasing rapidly.

Neither the RSI nor MACD shows any clear bearish divergences, indicating that the increase may continue.

Finally, the long-term wave count shows a completed five-wave decline (white) since the all-time high. If this is the accurate count, ARB has begun an A-B-C corrective structure and is currently in wave A.

If the upward movement is corrective, ARB will likely reach a high near the $1.65 area, reaching the 0.618 Fibonacci retracement resistance level. On the other hand, if the increase is impulsive, the ARB price could reach new highs.

As of the time of writing, it is impossible to determine which is the case. Rather, the reaction once ARB gets to $1.65 can help determine the future outlook.

ARB Price to $1

The ARB price has likely reached a local bottom with its all-time low in August. The price action and indicator readings in the weekly and daily time frame support this.

While the wave count suggests the upward movement is corrective, it still gives a target of $1.65 for the top of the current movement.

About the Author

Valdrin Tahiri

Valdrin discovered cryptocurrencies while getting his MSc in Financial Markets from the Barcelona School of Economics in 2017. He has been an avid investor and trader since. Valdrin has written for several cryptocurrency media companies such as BeInCrypto and CoinGape.

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