Arbitrum (ARB) price failed to sustain its upward movement despite breaking out from the bearish resistance line.
The price is now at risk of collapsing from its long-term structure, which could trigger a sharp drop to $1.0.
Arbitrage price failed to hold the breakout
ARB price has been rising since April 24, when it reached as low as $1.30. On the same day, it broke through the descending resistance line and reached a high of $1.50 two days later.
Given the presence of the descending resistance line for a week, it was expected that a breach from it would lead to a significant upward movement, confirming that the correction has ended.
However, ARB price did not cross the $1.50 horizontal resistance area (red icon).
If the decline continues, the next closest support area is at $1.17. This will push the ARB price below the breakout level.
ARB Price Prediction: Will the price drop below $1.0?
Technical analysis from the long-term 12-hour chart provides a clearer bearish prediction than the ARB. The main reason for this is the existence of an upward parallel channel.
An ascending parallel channel is a type of corrective pattern in which the price bounces between parallel resistance and support lines before finally breaking out. The fact that the price is trading at the bottom of the channel makes a breakdown more likely.
The $1.30 support area could act as a catalyst for a possible bearish move. Besides being the channel support line, the area is the 0.382 Fibonacci retracement support level (white).
The Fibonacci retracement levels theory suggests that after a significant price move in one direction, the price will partially retrace or return to the previous price level before continuing in its original direction. This principle can be used to determine the peak of potential future upward movements.
Therefore, its collapse could lead to a sharp drop towards $1. But if ARB price breaks above $1.50, it could reach an all-time high of $1.80.
Moreover, the rally and closing above the center line of the channel will invalidate this bearish hypothesis. In this case, the price of the ARB token is likely to move higher, towards a new all-time high of $1.95.
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In line with Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate and unbiased reporting, but market conditions are subject to change without notice. Always do your own research and consult with a professional before making any financial decisions.