- Arbitrum’s (ARB) value dipped by over 10% following Bitcoin’s (BTC) fall below $28k.
- Despite the downturn, there’s a possibility for ARB to rebound, especially if Bitcoin remains stable.
According to a recent Coinglass update, Arbitrum (ARB), a prominent altcoin in the cryptocurrency market, faced a significant dip in its valuation following Bitcoin’s (BTC) descent below the $28k threshold. This downturn for ARB arrived notably at a pivotal confluence area, marked at $0.85. Interestingly, this downturn emerged just as ARB was riding high on added gains from BTC’s surge to $28k. Such a swift shift has raised questions among investors and traders about ARB’s potential trajectory, especially when considering Bitcoin’s influential role in the market dynamics.
Understanding the Confluence Zone
Delving deeper into ARB’s current price metrics, it’s evident that a significant price rejection took place around the overhead barrier and the daily bullish order block, pegged between $0.9329 and $0.9985. At the time of reporting, ARB’s value was lingering in a pivotal confluence area. Historically, this area represents a previous breakout point at $0.87 from the prolonged rally witnessed in late September. Additionally, the zone features crucial indicators such as the dynamic 50- Exponential Moving Average and a price variance ranging from $0.84 to $0.88.
ARB’s Potential Resurgence
All hope isn’t lost for ARB. If Bitcoin can hold its ground and prevent further losses, there’s a chance for ARB to spring back. Optimistic projections put the next bullish targets for ARB at around $0.916, advancing further to the range of $0.9329 to $0.9985. A successful move towards the latter could spell an approximately 8% profit for potential buyers. Nonetheless, should ARB’s value plunge below the current confluence zone, it could spell the end of the prevailing bullish sentiment.
Market Insights and Risks
Interestingly, the inflow of capital into ARB’s market remains predominantly positive, even with the slight decrease observed in recent days. The true power of buyers in this market scenario will become clearer if the Relative Strength Index (RSI) showcases a robust rebound, particularly at the 50 mark. However, caution is the name of the game. Embracing a bullish stance comes with its set of risks. According to the latest data from Coinglass, there’s been a notable discrepancy in the liquidation of long and short positions for ARB. In the 12 hours leading up to this report, ARB saw a staggering $50k liquidation of long positions, dwarfing the <$20k seen for short positions.
Lastly, the overarching sentiment for ARB remains heavily tethered to Bitcoin’s performance. A bullish turn for BTC could potentially sway market sentiment in ARB’s favor, emphasizing the importance of closely monitoring Bitcoin’s movements for effective risk management and trading strategy fine-tuning.
