Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
- ARB’s drop eased temporarily at a key confluence area of $0.87.
- Liquidity areas exist at $0.858 and $0.894.
Arbitrum [ARB] reversed recent gains after Bitcoin [BTC] dropped below $28k. The altcoin’s pullback hit a key confluence area and could offer ARB’s bull reprieve if BTC doesn’t post more losses.
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ARB saw extra gains as BTC hit $28k, but the king coin’s losses afterward exposed the altcoin to sellers. ARB dropped over 10% to a confluence area of $0.85.
Will the confluence zone stop the plunge?
Source: ARB/USDT on TradingView
The recent price rejection happened at the overhead hurdle and the daily bullish order block (OB) of $0.9329 – $0.9985 (red).
Nevertheless, the pullback hit a key confluence area at press time. The area is the previous breakout level of $0.87 during the extended rally in late September. In addition, the area includes a dynamic 50- Exponential Moving Average (EMA), yellow, and a price imbalance of $0.84 – $0.88 (white).
So, if BTC doesn’t drop further, ARB could rebound from the level. The next bullish targets exist at $0.916, and the roadblock of $0.9329 – $0.9985 (red). A move to the second target could present a potential 8% gain for buyers.
A drop below the confluence area will invalidate the bullish bias.
Meanwhile, capital inflows into the ARB’s market were positive despite a slight drop in the past few days. But buyers’ influence could be confirmed if the Relative Strength Index (RSI) rebounds strongly at the 50 mark.
Long positions were at risk
Source: Coinglass
The above bullish bias is a risky move, given long positions were extremely discouraged at press time. According to Coinglass, ARB recorded over $50k liquidations of long positions compared to <$20k short positions in the past 12 hours before press time.
How much are 1,10,100 ARBs worth today?
However, a bullish BTC could flip market sentiment in favor of the bulls. Hence, tracking BTC movement is crucial for risk mitigation and trade set-up optimization.
