Arbitrum In Freefall, Dips Below $2 As Experts Analyze Recovery Timelines
February 23 2024 - 6:00AM
NEWSBTC
Arbitrum (ARB), the Ethereum Layer 2 scaling solution, has
experienced a recent price drop, falling below the $2 mark after a
brief attempt to establish a new price floor. This decline,
attributed to several factors including increased selling pressure
and bearish technical indicators, raises questions about the
token’s short-term trajectory while highlighting long-term
potential. ARB price losing its grip on the $2 handle. Source:
Coingecko Related Reading: Bitcoin Wallets Bleed: 730K Investors
Exit Despite Record $7 Billion ETF Inflows Selling Spree Triggers
Downward Spiral The price decline began with a surge in selling
pressure, most notably from Convex Finance. Over the past 24 hours,
the DeFi giant offloaded 901,392 ARB tokens, valued at $1.63
million, at an average price of $1.8 per token. This move,
representing a profit of over $400,000 since acquiring the tokens
in an airdrop last year, triggered a domino effect, with other
investors following suit. $ARB price dropped ~9% in the past 24
hours!@ConvexFinance further deteriorates the price by selling
901,392 $ARB ($1.63M) for 559.4 $ETH at ~$1.812 in the past 45
minutes. They received those $ARB from the DAO airdrop in Apr 2023,
which was then worth only $1.2M. Token flow:…
pic.twitter.com/09al0a71Oj — Spot On Chain (@spotonchain) February
22, 2024 Bearish Indicators Reinforce Downtrend Technical
indicators on the daily timeframe chart further paint a bearish
picture. The short-term moving average (SMA), previously acting as
support around the $2 mark, has flipped to resistance. The Relative
Strength Index (RSI) dipped below the neutral line, suggesting a
dominant downward trend, albeit a weak one. Despite the decline,
signs of resilience emerge. The token experienced a slight recovery
of 0.2%, currently trading around $1.88. Additionally, the Funding
Rate on derivatives platforms like Coinglass remains positive at
0.014%, indicating that buyers still hold some control, albeit with
less aggressiveness compared to before. ARBUSD trading at $1.77 on
the 24-hour chart: TradingView.com Low Derivative Interest: A Point
Of Caution However, the derivative market paints a less optimistic
picture. Open Interest, a metric reflecting the total amount of
capital locked in futures contracts, stands at around $254 million,
indicating relatively low interest in ARB compared to other tokens.
This lack of engagement could potentially limit upward momentum and
price stability. Long-Term Prospects Remain Promising Despite the
recent price dip, Arbitrum boasts strong fundamentals and long-term
potential. Its fast and affordable transactions, coupled with
growing developer adoption and ecosystem development, continue to
attract interest. Recent partnerships like ApeCoin’s ApeChain
launch on Arbitrum further solidify its position as a leading Layer
2 solution. Related Reading: Green Bitcoin: Sustainable Energy
Usage Surges To Record 55% High While the current price movement
suggests a period of consolidation, Arbitrum’s long-term prospects
remain promising. Investors should carefully consider market
trends, technical analysis, and fundamental factors before making
any investment decisions. Featured image from Kamil
Pietrzak/Unsplash, chart from TradingView
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