Here’s why Arbitrum can soon start favoring the bulls
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
Arbitrum [ARB] registered gains of 8.4% within the past 24 hours to trade at $1.259, as of press time. With prices approaching the resistance level at $1.299, bulls could look to flip the level from resistance to support.
Bitcoin [BTC] reclaiming the $27k and pushing on for $28k could see Arbitrum bulls extend their short-term bullish gains.
Bulls use $1.106 support level to rally again
A look at ARB on the four-hour timeframe highlighted the significance of the $1.106 support level. This support level was tested thrice between 8 May and 26 May, with the level resisting bearish momentum on each occasion. The most recent retest of the level initiated a bullish rally that broke above the lower low of the bearish swing.
With price bouncing off the $1.106 support level again, indicators highlighted the possibility of more gains for bulls from this support level. The Relative Strength Indicator (RSI) crossed into the overbought zone and stood at 76 to signal intense buying pressure. The Chaikin Money Flow (CMF) also posted positive capital inflow with a reading of +0.10.
A major hurdle for bulls lies at the $1.299 resistance level. A candle close above this resistance level could spur bulls to target $1.422 and $1.577. Conversely, a failure to break the level could see bears push prices back down to finally break the key $1.106 support level.
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Speculators bullish on the asset
According to Coinglass, over $2.56M worth of short positions were wrecked within the past 24 hours, compared to only $269.09k worth of long positions. This reinforced short-term bullish momentum which could propel bulls to clear the $1.299 resistance area.
In addition, ARB’s funding rate remained positive over the same period. This indicated that buyers were willing to advance the bullish sentiment on ARB. As such, there is a high chance of bulls overcoming the $1.299 obstacle, especially if BTC records more gains.