Arbitrum (ARB) ready for 40% drop, says analyst

The Arbitrum (ARB) cryptocurrency recently exited its consolidation phase, which persisted through most of January, February, and March. This breakout, according to analyst Akash Girimath, signals the beginning of a possible downward movement after the crash that occurred in the second week of March.

Girimath points out that during this decline, ARB turned a crucial support level into resistance, confirming the extension of the downtrend.

“Arbitrum price broke below the $1.79 and $1.67 support levels starting from the March 16 crash. Since then, ARB has lost 24% and is currently trading at $1.48. Generally, a break of important support is followed by a retest, confirming the move from that level to resistance,” he said.

According to him, if this scenario materializes, investors can expect the Arbitrum price to trigger an upward movement of 13% to 20%, retesting the previously mentioned resistance zone.

Arbitrum (ARB) Price Analysis

However, if sellers are in control, ARB is likely to face a strong rejection, taking it to the next key support level at $1.34, around 20% below $1.67.

“The Relative Strength Index (RSI) and Awesome Oscillator (AO) indicators corroborate this bearish movement, as they remain below their respective average levels of 50 and 0,” he said.

Girimath also highlighted that data from IntoTheBlock shows that 175,000 addresses purchased 895 million ARB at an average price of $1.65 and are at a loss. These investors accumulated ARB between $1.58 and $1.70, which coincides with the observed resistance level from a technical point of view.

“Between $1.36 and $1.45, approximately 56,400 addresses purchased 2.15 billion ARB at an average price of $1.41. These investors are still in profit and will likely accumulate more if the Arbitrum price continues to fall. Interestingly, this level also coincides with the previously mentioned technical support,” he said.

On the other hand, according to him, if the Arbitrum price regains the $1.79 resistance level and turns it into solid support, this would invalidate the bearish thesis. In this case, ARB could attempt a 12% move towards the $2 psychological level.