Arbitrum (ARB) Traps 99% of Holders in Losses, Echoing Bear Market Trend

Key Takeaways

• Since falling to a new low, Arbitrum’s price has left nearly 100% of the token holders underwater.
• Resistance at $0.52 shows its struggles might continue as holders wait to break even.
• If ARB breaks down the symmetrical triangle on the 4-hour chart, the price could slide below $0.37.

Arbitrum (ARB), launched after the 2022 bear market, shows signs of a potential return to hawkish conditions. This sentiment emerged just 15 days after the token hit an all-time low of $0.37.

Despite a 26% rebound from that crest, only 1% of holders are breakeven. The remaining 99% sit on unrealized losses. This scenario mirrors past bear market trends, raising concerns about ARB’s near-term performance.

With no clear signs of recovery, here’s what could be next for the altcoin.

ARB Price in Depressing State

Between Nov. 6 and Dec.7, 2024, Arbitrum’s price rallied from $0.47 to $1.17. At that time, the performance hinted at a sustained rally, with market observers suggesting that the bull market was in full force.

Nearly three months later, ARB is back to square one. The ARB/USD daily chart shows that the cryptocurrency is at the depression stage of the market cycle.

At this phase, asset prices find recovering challenging, sometimes leading to a return to the bear market.

On the same chart, ARB had previously dropped below the $0.47 support on Feb.7. Even though it has recovered from that decline, the red line of the Supertrend rests above Arbitrum’s price.

This indicator suggests that ARB could face strong resistance if it attempts to climb toward $0.60. Further, breaking above this level may prove challenging, potentially leading to a price pullback.

On-Chain Analysis Shows Key Resistance

The In/Out of Money Around Price (IOMAP) supports this thesis from an on-chain perspective. This IOMAP focuses on the most relevant price clusters within 15% of the current value in both directions.

With this approach, one can identify key buying and selling zones, which are likely to serve as support and resistance. Typically, the higher the volume of the money, the stronger the support, while the other way around indicates resistance.

In ARB’s case, the major resistance lies between $0.52 and $0.53. At this price range, nearly 30,000 addresses hold over 1 billion tokens.

Thus, if Arbitrum’s price tries to approach this point, it could face intense selling pressure that could prevent a further upswing.

ARB Price Could Fall to New Low

Another look at the technical perspective shows that ARB’s price trades within a symmetrical triangle on the 4-hour chart. This pattern shows equal trendlines converging from the lower highs and higher lows, indicating an unclear trend.

However, amid this technical setup, the Relative Strength Index (RSI) is below the neutral point, indicating a bearish momentum around ARB.

If this position remains the same, Arbitrum’s price could decline to $0.38. If the broader market conditions become highly bearish, the value could drop to a new low.

However, this trend might change if Arbitrum’s price retest climbs above the resistance at $0.49.

In that scenario, the cryptocurrency’s value could jump to $0.60. If demand for the token increases, this upswing could be higher, and ARB could reclaim $0.74.