BeInCrypto - The Arbitrum (ARB) price is at risk of breaking down from a confluence of support levels, something that could catalyze a sharp fall.
The level is created by a long-term ascending parallel channel’s support line and an important Fib level. Whether the price bounces or breaks down could determine the future trend’s direction.
Arbitrum Price At Risk of Breakdown
The long-term daily chart technical analysis provides a decisively bearish ARB price prediction. The primary cause of this is the existence of an ascending parallel channel.
The ascending parallel channel is a corrective pattern where the price fluctuates between parallel resistance and support lines before finally breaking down.
The likelihood of a breakdown increases since the price trades in the lower part of the channel.
ARB/USDT Daily Chart. Source: Trading View
The 0.382 Fib retracement support level (white) coincides with the channel’s support line, making the $1.30 support area a possible catalyst for a downward movement.
According to the Fibonacci retracement theory, the price tends to partially retrace to a prior price level after a significant price move in one direction before resuming its original direction.
ARB Price Prediction: Can Price Salvage Rally?
While the daily time frame is bearish, the short-term four-hour one provides a bullish outlook. The price has created a double bottom, considered a bullish pattern, leading to upward movements most of the time.
Additionally, the bullish pattern has been combined with a bullish divergence in the RSI (green line). This is a type of bullish occurrence in which a momentum decrease does not accompany a price decrease.
Therefore, it supports the bullish outlook.
If an increase follows, the price can move to the 0.618 Fib retracement resistance level at $1.60. The level also coincides with the long-term channel’s midline. The reaction once it gets there will be crucial in determining the future trend.
ARB/USDT Two-Hour Chart. Source: Trading View
If the ARB price breaks out above $1.60, it could reach its all-time high at $1.80. However, a breakdown from the channel’s support line could result in a sharp decline towards $1.0, the 0.618 Fib retracement support level.
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