Key Takeaways
ARB, the governance token of the Ethereum layer-2 project, is among today’s top gainers out of the top 100 in the market. In the last 24 hours, its price has increased by 10%.
This development came after the American exchange, Robinhood, confirmed that it had listed ARB.
While the listing has acted as a catalyst for Arbitrum’s price appreciation, indicators suggest that certain resistance ahead could hinder further upside.
Indicators Warn of Potential ARB Reversal
The Arbitrum Robinhood listing occurred on Wednesday, March 5, when the exchange announced it on X (formerly Twitter). Before the disclosure, ARB’s price was $0.38.
Hours later, the price jumped to $0.42, which is the region it currently trades in. Despite the 10% hike, the 4-hour chart shows that ARB is unlikely to build on this recent increase.
As seen below, Arbitrum’s technical setup shows that the price still wobbles around a descending channel. The channel shows notable resistance near $0.46 and weak support around $0.37.
Besides that, the green line of the Supertrend indicator hovers above ARB’s price, reinforcing the resistance around the token.
Thus, if ARB’s price tries to push above $0.46, it is likely to experience a pullback that could erase its recent gains.
From an on-chain perspective, data from Santiment also agrees that the ARB upswing could be short-lived. One metric supporting this bias is the adjusted price DAA divergence.
DAA stands for Daily Active Addresses and indicates the level of user interaction with a cryptocurrency. When it increases, it indicates a rise in user engagement, which is bullish.
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Amid the Arbitrum Robinhood listing, the price DAA divergence was positive and likely contributed to the hike.
However, as of this writing, the metric’s rating has fallen to the negative region, indicating reduced interaction with the token.
This decline could affect ARB’s price and possibly lead to a drawdown if sustained.
ARB Price to Face Critical Test
On the daily timeframe, ARB’s price still trades below the 20-period Exponential Moving Average (EMA). This position indicates a bearish trend, especially since the 20 EMA (blue) reading continues to fall, and the token has yet to break above it.
In line with the EMA, the Relative Strength Index (RSI) is also confined below a falling trendline. As of this writing, the RSI reading stands at 42.94. Since it has yet to rise past the neutral point, momentum is largely bearish.
Should this trend continue, Arbitrum’s price might experience a decline toward $0.35. However, the Arbitrum Robinhood listing effect could come back into play if the token breaks above the 20 EMA.
If that happens, the next target for ARB could be around $0.56, near the 0.236 Fibonacci level. Should demand for ARB increase, the cryptocurrency could rise as high as $0.69.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
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