ARB Tests Key Floor as Oversold Signals Hint at Possible Bounce
Arbitrum’s ARB token continues to trade under sustained bearish pressure on the daily chart, with price action drifting toward a key support zone after a series of lower closes.
Recent candles reflect weakening bullish conviction, as each recovery attempt has struggled to gain traction. This suggests that sellers still dominate the broader structure, even as the price approaches an important decision point.
The trend also remains tilted to the downside, with ARB trading below both the short-term and medium-term exponential moving averages. This alignment typically signals a continuation of bearish momentum, as the faster moving average remains beneath the slower one.
It also indicates that rallies are being sold into rather than sustained, reinforcing the idea that the market is still in a corrective phase rather than the start of a fresh uptrend.
ARB Momentum Indicators Hint at Slowing Bearish Pressure
While the overall trend remains negative, momentum indicators are beginning to show subtle shifts. The MACD histogram has been printing mild positive bars, which suggests that selling pressure is no longer accelerating at the same pace as before. This type of structure often points to a weakening downtrend, where price may either consolidate or attempt a short-term bounce.
Daily chart for ARB/USDT (Source: TradingView)
At the same time, the Relative Strength Index remains in oversold territory. This indicates that selling has been intense and that the market may be approaching exhaustion. Oversold readings often precede relief rallies, especially when they occur near important support zones. However, such signals should be treated with caution, as prices can remain oversold for extended periods during strong bearish trends.
Key Support and Resistance Zones in Focus
From a structural perspective, the immediate support sits around $0.1077, a level that has already been tested by recent price action. This zone now represents a critical line for bulls to defend. If the level holds, it could provide a base for a short-term rebound.
On the upside, the first major resistance lies at $0.1205. Reclaiming this level would be an early indication that buying pressure is returning to the market. If momentum continues to build, the price could then attempt to move toward higher resistance zones at $0.1971 and $0.2206. However, each of these areas is likely to attract strong selling interest, given the broader bearish trend.
A decisive break below the $0.1077 support, on the other hand, could expose the pair to deeper losses, as there are limited strong demand zones nearby on the daily timeframe.
Order Book Signals Heavy Supply and Distant Demand
Order book data reveals that significant bid walls are positioned well below the current price. The most notable clusters sit around the $0.0816, $0.0417, and $0.0403 regions. These areas could act as deeper support zones if the downtrend accelerates, but their distance from the current price also highlights the potential for sharp drawdowns if the existing support fails.
On the upside, several strong ask walls are positioned at $0.1700, $0.2200, and $0.2300. These clusters indicate that even if the price begins to recover, it is likely to face heavy resistance as it approaches those levels.
Clearing the first major wall near $0.1700 would likely require a meaningful increase in buying volume and could signal a shift in broader sentiment.
Potential Trade Scenarios for Bulls and Bears
The current technical structure presents two primary scenarios for traders.
A bullish setup would likely depend on the ARB price holding above the $0.1077 support and reclaiming the $0.1205 resistance level. Such a move could indicate that sellers are losing control, potentially opening the door for a recovery toward higher resistance zones.
Conversely, a breakdown below support would reinforce the bearish trend and could create opportunities for short positions, particularly on retests of the broken support level as new resistance. In this scenario, traders would likely look toward deeper demand zones as potential exit targets.
Overall, the technical outlook remains cautiously bearish, with oversold conditions hinting at the possibility of a short-term bounce. Until the price reclaims key resistance levels and establishes a stronger structure above the moving averages, the broader trend is likely to remain under downward pressure.
Disclaimer: The information presented in this article is for informational and educational purposes only. It does not constitute financial advice. Ecoinimist is not responsible for any losses incurred. Readers should exercise caution before acting on this content.
