Will Arbitrum [ARB] see a bullish reaction from the golden pocket?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
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- The lower timeframe momentum strongly favored the bears.
- The Fibonacci retracement levels showed the bulls had some hope of recovery.
The momentum was firmly in bearish hands, and the market structure was bearish as well. The Arbitrum [ARB] market looked primed to post further losses. With Bitcoin [BTC] in the grip of the sellers as well, another wave of selling could engulf the crypto market. Yet, all hope was not lost for ARB bulls.
How much are 1,10,100 ARBs worth today?
In late March, Arbitrum buyers defended the $1.1 support level ferociously. The breakout past $1.42 was encouraging. The sharp dive in prices in recent days could be reversed, but traders must also be prepared for a move toward $1.1.
The $1.3-$1.4 golden pocket could revive the former uptrendA set of Fibonacci retracement levels (yellow) was plotted based on ARB’s move up from $1.15 to $1.82 last week. It showed the 61.8% and 78.6% retracement levels lay at $1.4 and $1.295, respectively.
The area within these two levels is the golden pocket. If the lower timeframe downtrend of ARB was to reverse, this would be an ideal zone. The $1.42 level of resistance had been significant in late March. Hence, the recent breakout past it and the subsequent retracement could be a buying opportunity.
However, the OBV was in a steady decline during the past three days. This showed selling pressure, and buyers can wait for the OBV to move upward. The RSI also showed a downtrend in progress with a reading of 37. Traders must not give in to either panic or FOMO, and can wait for a move back above $1.5 before looking to buy ARB.
Realistic or not, here’s ARB’s market cap in BTC’s terms
A declining Open Interest showed sidelined speculatorsThe Open Interest slid downward in tandem with the prices. Each move downward for ARB was accompanied by a plunge in OI. This showed long positions were discouraged and sidelined participants.
Even though the funding rate was positive, the sentiment was not bullish enough for a rally to occur soon. The evidence showed futures traders and spot buyers were weak, and ARB could post further losses to reach $1.3.