Arbitrum (ARB) may fall by 25% and update the annual minimum
Date: 2023-07-27 Author: Karina Ziganova Categories: BLOCKCHAIN, BUSINESS
Arbitrum (ARB) is at risk of falling out of the correction pattern, which has been present on the chart since June 10. This will confirm that the trend is bearish and may lead to an update of the annual low
Price dynamics, RSI readings, and wave analysis indicate that the ARB trend is bearish. All this confirms the probability of a bearish breakout and a continuation of the decline.
The price of Arbitrum threatens a sharp decline
As the results of the technical analysis of the daily chart show, on July 16, ARB, the coin of the Arbitrum project, broke through the horizontal area of $1.25. At that moment, it seemed that this was a bullish breakout and the beginning of a new upward movement.
However, hopes were not justified. Shortly after the breakout, the ARB price pulled back below this area. This suggests that the breakout was only a price deviation (red circle). Such bearish developments are often followed by declines.
The bearish sentiment intensified even more when the price of ARB fell below the support line of the rising parallel channel on July 24. Such price patterns are usually associated with corrective movements. Accordingly, a bearish breakout from it is another confirmation of a bearish trend.
Finally, the daily RSI also gives bearish signals. This momentum indicator is now declining and is below the 50 mark (red icon). All of these are considered signs of a bearish trend.
ARB forecast: the annual minimum may be updated
Meanwhile, the wave analysis of the shorter 6-hour timeframe also supports the bearish signals of the daily chart.
The wave chart shows the completed corrective structure A-B-C. This is evident due to the overlap (white line) of waves A and C and the presence of an ascending parallel channel. A confident close below the channel's support line will confirm the bearish breakout and the correctness of this analysis.
Although the nearest support area is at $1.05, the results of the wave analysis suggest that the price of ARB expects to fall to a one-year low of $0.90.
Despite such a bearish outlook, an increase in ARB above the high of wave C at $1.35 (red line) will mean that the trend remains bullish.
In this case, the price could reach the next long-term resistance at $1.65.
