Will Arbitrum Turn Bullish?

Arbitrum's ARB has failed to hold on to its peaks achieved in early 2024 and has tumbled throughout the following months, but the ambitious cryptocurrency may be set to grow once more.

As the demand for layer 2 network systems grows, opportunities are emerging for Arbitrum to expand as a leading project in this technology. Such fundamental developments generally signal positive trends for future price movements.

However, for consistent profitability in trading, it is essential to understand the technical aspects as well.

Daily time frame analysis

ARBUSD - 1 Day Time Frame

Firstly, it's important to recognize that the market structure has been bearish since early 2024. Currently, on the weekly timeframe, the market is entering a Buy-side Imbalance Sell-side Inefficiency (BISI) zone.

On the daily timeframe, the "fundamental wick" of the candle is noticeable. From an algorithmic perspective, candle wicks represent gaps, making the 0.5 level critically important. At this level, there has been a notable concentration of internal liquidity.

This accumulation allows strong market participants to capitalize on Arbitrum's increasing fundamental relevance and its comparatively low price.

Trading strategy

For retail traders and investors looking to initiate buy positions, it's crucial to wait for a bullish impulse move that would indicate a structural change on a lower timeframe, such as a 4-hour chart. This might involve waiting for an Inversion Fair Value Gap or an Order Block to form.

However, this approach is not without risks. If the price continues to move bearishly without showing bullish signals, a deeper correction could occur due to the full realization of the weekly BISI.

Overall, while the underlying developments in Arbitrum's technology are promising, traders should employ a cautious approach, monitoring technical indicators closely to optimize entry and exit points in this volatile environment.