Arbitrum: Will sellers exploit these crucial roadblocks?
Arbitrum [ARB] short-term recovery faces key obstacles which could offer short-sellers an opening into the market if bypassing them become difficult.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- ARB faced a crucial range high and support-cum-resistance level of $1.0623.
- Long positions were discouraged in the past 12 hours by the time of writing.
Arbitrum [ARB], a successful Layer 2 (L2) roll-up, has struggled to regain its $1 psychological level in the past week. It dropped below the $1 level after Bitcoin [BTC] retested $24k on 10 June.
How much are 1,10,100 ARBs worth today?
However, BTC reclaimed $25k and crossed $26k, but it remains to be seen if it will flip bullish on the higher timeframe by hitting $27k. ARB hit $0.9075 in the same period before rebounding at press time. But the recovery faces crucial obstacles.
Can recovery bypass these obstacles?
ARB has been in narrow consolidation between $0.9075 and $1.034 between 10-18 June. Notably, the range high aligns with a bearish order block (OB) formed on $1.001 – $1.034 (white) on the four-hour chart on 13 June, slightly above the bearish OB lays the 38.2% Fib level of $1.0417.
In addition, the May support-cum-resistance level at $1.0623 could further make a move up beyond the range high, a bumpy ride for bulls. Hence, a price rejection at the range-high ($1.034) could see ARB retrace to the mid-range of $0.973 or the range low of $0.908.
If that’s the case, shorting at the range high could offer a good risk ratio, especially if the drop retests the range lows.
But a session close above 38.2% Fib level ($1.042) will invalidate the bearish thesis, especially if BTC forays into the $27k zone. But ARB bulls must flip $1.62 into support to gain more edge.
The RSI and OBV increased, denoting improved buying pressure and demand in the past few days.
More long positions discouraged
Read Arbitrum’s [ARB] Price Prediction 2023-24
According to Coinglass, long positions had a rough time in the past 12 hours before press time. Over $100k worth of long positions were wrecked, compared to less than $10k of short positions, painting a bearish outlook for ARB.
Although this could cement a shorting opportunity, a bullish BTC above $27k could expose most into a bear trap. Thus, tracking BTC price action before making moves is crucial.
