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Arbitrum’s (ARB) extended its price movement between the $1.74 support level and the $2 resistance level with another rejection at the $2 price zone. With ARB posting two successive bearish candles below $2 on the four-hour timeframe, this offers a shorting opportunity for sellers with the possibility of double-digit returns.
Arbitrum - Enabling Scale for ETH Smart Contracts
Arbitrum is one of the leading Layer 2 technologies that allows users and developers alike to explore and build on Ethereum. Arbitrum improves the capabilities of smart contracts on Ethereum by boosting their speed and scalability with additional privacy features.
Arbitrum allows developers to run unmodified Ethereum Virtual Machine (EVM) contracts and transactions on its Layer 2 platform, while benefiting from Ethereum's Layer 1 security. This is done through a technique known as optimistic rollups.
The ARB token is the native token of the Arbitrum chain and it is used for governance within the Arbitrum DAO (Decentralized Autonomous Organization).
Bullish Momentum Stalls Again
The resistance level at $2 has continued to limit ARB’s bullish momentum. With this price zone still holding some sell orders, buyers have found it difficult to scale the price hurdle.
This has contributed to ARB trading within a compact range on the four-hour timeframe, affording intraday traders the opportunity for short-term profit moves.
With ARB currently at $1.95, short-term traders can ride the downward move to the $1.74 support level for 12% gains. However, traders should watch out for a bullish candle reversal on the lower timeframes, based on market sentiment. This could invalidate the short term bearish thesis and lead ARB to break out of the range.
In the meantime, the Relative Strength Index (RSI) and Chaikin Money Flow (CMF) highlighted the short-term bearish move by dipping toward the neutral 50 and registering muted capital inflows.
Disclaimer: This article does not constitute trading, investment, financial, or other types of advice. It is solely the writer’s opinion. Please conduct your due diligence before making any trading or investment decisions.