As a seasoned crypto investor with battle scars from the 2017 bull run and the subsequent bear market, I find myself once again navigating the treacherous waters of the cryptocurrency market. The recent dip in Bitcoin and the subsequent correction across major altcoins, including Arbitrum, has me feeling a familiar mix of fear and greed.
As a seasoned cryptocurrency investor with several years of experience under my belt, I’ve witnessed numerous market fluctuations and have grown accustomed to the ebb and flow of digital asset prices. However, this week’s events in the crypto market took me by surprise. The sudden increase in supply pressure, as evidenced by Bitcoin‘s sharp downturn from $70,000 to $66,254—a 5% drop—left me feeling a pang of unease.
Arbitrum Price Analysis: Will the Falling Wedge Pattern Trigger a Bullish Reversal?
In simpler terms, the cryptocurrency market’s rebound energy has weakened over the past week as Bitcoin fails to stay above $70000. This has caused a price drop for many major altcoins, such as Arbitrum, due to an oversupply of coins available for sale.
23rd July saw a significant change in Arbitrum’s price trend as it broke through the resistance at $0.828, causing a 16.8% drop and reaching $0.69. A closer look at the daily chart reveals this downward trend occurring within a falling wedge pattern formation.
1. Since April 2024, the intersecting trendlines in the pattern have been behaving as both resistance and support, ultimately causing a decline in the coin’s price due to its dynamic nature. The fact that the coin is currently trading below its daily Exponential Moving Averages (EMAs) of 20, 50, 100, and 200 suggests a strong inclination towards lower prices. In simpler terms, it seems as though the coin’s price trend is more likely to continue moving downward.
Based on data obtained from Dune Analytics, it appears that the number of active Arbitrum network addresses has noticeably decreased in the past three months. In May, there were approximately 4.01 million active addresses, but this figure now stands at around 648.2 thousand, representing an 83.84% decrease. Additionally, a significant drop can also be seen in the number of new users joining the network, with the on-chain metric falling from 2.7 million to 181.6 thousand – a decrease of 93.27%.
As I delve deeper into the data, I’m noticing a significant decrease in the number of active and new users on our network. This trend might indicate dwindling interest or a shift in our user base. Such a change could potentially impact network activity and, as a consequence, influence the value of assets within our ecosystem.
1. Maintaining a bearish trend could lead to a potential 16% drop in Arbitrum’s price, reaching a possible support level at $0.565, and potentially dipping further down to $0.46 if the bearish momentum continues.
Instead of viewing it as a bearish sign, the forming of a falling wedge pattern now indicates a possible bullish reversal for the asset. This development could encourage buyers to attempt breaking through the resistance line at the trendline’s peak, leading to an increase in buying pressure and potentially pushing the asset back up to $0.24.
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2024-07-30 21:02