The price of the Ethereum L2 protocol Arbitrum corrected significantly in the last two weeks of trading after reaching the first relevant price target at 1.81 USD. Only in the area of the old breakout level at 1.27 US dollars did the ARB price find a bottom after a 30 percent price discount. The buyer side has recently been able to defend this zone several times. Today, Arbitrum tries to overcome the multiple resistance from the downtrend line and EMA50 (orange) and EMA200 (blue) in the 4-hour chart.
Despite high network activity, the price of the popular Ethereum (ETH) Layer2 scaling solution has so far not been able to sustainably benefit from its popularity among crypto users. In particular, the anger about the governance votes caused an uproar in the community. However, the Arbitrum Foundation vowed improvements to improve transparency in decision-making and therefore submitted new governance proposals to its community in April.
Arbitrum: Bullish price targets for the coming months
Bullish price targets: 1.36 USD, 1.40 USD, 1.48 USD, 1.59 USD, 1.63 USD, 1.70 US$, 1.82 USD, 1.96 USD, 2:15 USD
After a price recovery to the yellow resistance zone at 1.35 US dollars, the ARB price was initially unable to progress in the last few hours of trading. However, to confirm the bottoming of the past few days, Arbitrum needs to dynamically break out of this strong resistance area. Only then does the first price target in the form of the 23 Fibonacci retracement of the complete correction movement at 1.40 US dollars come into focus.
A jump above this resist will focus on the strong resistance zone at 1.48 USD. Here the ARB course failed at the end of April. The 38 Fibonacci retracement also runs here. If the buyer side can also dynamically pulverize this cross-resistance, a subsequent increase up to the old tear-off edge at 1.59 US dollars is to be expected. Here Arbitrum should fail at the first attempt.
If the bulls are able to break through this price level in the course of an overall market recovery, the upward movement is likely to extend to the red resistance area around 1.70 USD via a stopover at the Golden Pocket at 1.63 USD. This zone was already the focal point several times in the previous month. In addition, the 78 Fibonacci retracement can be found here as a course hurdle.
If Arbitrum also breaks through this price hurdle in the coming weeks, a retest of the previous month’s high of 1.82 US dollars is possible. Only a sustained breakout above this price level would spark further upward momentum. Heading for the overarching target at $1.96 and the maximum price target in the form of the 161 Fibonacci projection at 2.15 USD would be considered.
Arbitrum: Bearish price targets for the coming months
Bearish price targets: 1.30/1.28 USD, 1.23 USD, 1.18/1.15 USD, 0.96 USD, 0.88 USD, 0.73 USD
If the sell-side prevents another breakout above the yellow resistance zone, a retest of the green support area around the monthly low at 1.28 USD is likely. The cops have to be there. A break of this strong support would further cloud the chart picture. Then an extension of the correction to at least 1.23 US dollars should be planned.
However, depending on the situation in the crypto market, Arbitrum could even head directly for the support zone between 1.18 and 1.15 USD. Buyers are likely to resist in this area, as this is an attractive area for newcomers. Only when the bears also break through this price level and dynamically undercut the April low of 1.10 US dollars could the ARB price break further.
Possible correction targets can be found in the form of the 127 and 138 Fibonacci Extensions at 0.96 and 0.88 USD. Under the premise that the Bitcoin price will also drop drastically in the coming weeks and pull the Altoin sector south with it, Arbitrum could even fall back to the 161 Fibonacci extension at USD 0.73 at most. However, as long as the buy side stabilizes the ARB rate in the 1.15 USD area at the latest, a dip back to these bearish price levels is unlikely.
Looking at the indicators
The RSI on the 4-hour chart threatens to break out of the neutral zone between 45 and 55 to the south in the event of a correction extension, thus generating a fresh sell-signal. The MACD, on the other hand, still has a slight long signal, but is trading below the 0 line. Only when it is exceeded would the buy signal gain in strength. In the daily chart, the RSI is also trending weak and is trading at the lower edge of the neutral zone. Here, too, a fresh short signal is imminent if Arbitrum falls below the green support zone at 1.28 USD.
