Is Arbitrum Bullish or Bearish?

After a series of bearish movements, the cryptocurrency market has entered a consolidation phase, opening the door for strategic buying opportunities—provided the right conditions are met. Historically, the most profitable trades follow liquidity withdrawals, as these events often set the stage for impulsive price movements.

At BITmarkets, we’ve applied this principle to today’s analysis, identifying Arbitrum as a cryptocurrency with significant long-term growth potential.

Daily time frame analysis

ARBUSD - 1 Day Time Frame

Since a complete trading setup has not yet materialized, the current scenario should be evaluated based solely on the technical background of price action. As previously noted, Arbitrum has reached a critical Sell-Side Liquidity level, last observed in August of the previous year.

Simply put, traders who entered buy positions during that period—placing their Stop-Loss orders below the external low—have now been forced out of the market.

Given that crypto markets operate on a counterparty basis, this situation has created significant buying potential for institutional and commercial participants, enabling them to accumulate positions in this fundamentally strong cryptocurrency.

While it’s impossible to confirm definitively whether such accumulation has already occurred, this detail holds little relevance for retail traders. The key confirmation of a valid entry point can be identified directly on the price chart, making technical analysis the primary tool for informed decision-making.

Arbitrum price target

To validate a confirmed buying position, the price must close above the marked resistance zone on the daily timeframe, as illustrated in the attached chart. Until this breakout occurs, the market remains in a phase of bearish price delivery.

However, if the price successfully breaks and holds above this resistance zone, it will signal a shift in market structure, presenting an opportunity to enter a buy position. Target levels should be set at the identified Buy-Side Liquidity zones, which serve as key reference points for trade management based on an individual’s preferred time horizon.

As a final note, effective risk management is essential. The Stop-Loss order for this position could be placed below the internal low formed on Monday, February 3rd.

This strategy provides downside protection while allowing traders to capitalize on the potential upside movement that Arbitrum’s technical setup is signaling.