Arbitrum, an Ethereum layer-two scaling solution, is signaling a potential bullish breakout. This is confirmed by the token’s position within a falling wedge pattern on the daily chart, a typical bullish indicator. Currently, the price is moving close to the descending resistance level of around $0.66, a key point closely watched by both traders and investors.
As depicted in the 1-day chart below, a falling wedge pattern suggests that the asset might break out to the upside once it reaches the top of the wedge. The current price action of $0.66 has been tested multiple times, and each test is inching closer to a possible breakout. Another key indicator is the Relative Strength Index [RSI] on the chart, which also depicts signs of potential upward momentum, suggesting that buyers may be gaining control.
If ARB successfully breaks out from the wedge pattern, it could lead to significant upward movement. The primary target for this breakout is the resistance level at $1.80. In contrast, if the price fails to break through the descending resistance, the support zone around $0.50 will be crucial in preventing further downside.
That said, Arbitrum is recognized as one of the fundamentally strong and undervalued altcoins. The $0.80 level, which was a strong support before, has now turned into resistance. However, some analysts believe that the recent breakdown below $0.80 was fake and that Arbitrum is poised for a significant bounce.
It has been fudded by the token unlock and the useless governance narrative. But interestingly, OP and IMX are also governance tokens, have monthly unlocks, and are not fudded – I wonder why? I agree ARB is way undervalued. King of L2, I think it’s good to add this to my bag.
92.6M Arbitrum Unlock Looms
This comes amidst after the Layer-2 solution is scheduled to unlock 92.6 million ARB on July 16. The team, advisors, and investors will be the beneficiary of these tokens.
Moreover, the Arbitrum Foundation introduced a proposal to seek additional revenue through MEV [Miner Extractable Value], with the possibility of collecting bids in ARB and burning them, effectively reducing supply.
Market experts believe that the chances of implementation of the proposal are high as the Foundation itself has initiated. If these proposals get the community’s green light, the ARB token will start capturing value, a significant milestone for L2 tokens. While the extent of the value capture is not yet known, this strategic shift toward rewarding token holders is a positive sign for Arbitrum’s future.
