Seller Pressure Threatens to Halt Arbitrum\'s $3.65 Surge - What You Need to Know

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Arbitrum [ARB] has seen a strong recovery over the past month, recording an impressive 23.13% gain to bounce back from a significant drop. However, in the last 24 hours, the momentum has slowed down, with only a modest 1.37% increase recorded.

There is some optimism in the market with the formation of a positive pattern. But will ARB take the bullish path? AMBCrypto explores this further.

Crypto analyst Alex Clay has identified a falling wedge pattern in ARB’s price action—a classic bullish formation where prices consolidate downward before an upward breakout. Historically, this pattern has yielded gains of up to 82.24%.

ARB recently broke out of this pattern, signaling the potential for further upside. Clay’s chart highlights three key targets: $1.250, $1.830, and $3.650.

Supporting this outlook, the Relative Strength Index (RSI) is forming a rounding bottom as it trends into positive territory. This suggests ARB is entering a favorable zone for continued gains.

Clay expressed optimism about ARB’s prospects, stating,

“As $ETH recovers, I am looking for its leading Layer 2 projects [like ARB] to rise as well.”

Ethereum’s price recovery is likely to significantly influence Layer 2 tokens like ARB, which depend on Ethereum’s performance for growth.

In the past week, ETH has begun its recovery, drawing renewed interest from traditional investors. Data from Sosovalue reveals that ETH spot ETF saw its largest single-week inflow, totaling $515.17 million—a clear indication that investors are accumulating the asset.

If ETH sustains this upward trajectory, the positive momentum is expected to extend to Ethereum-reliant assets like ARB. This would not only improve market sentiment but also serve as a strong catalyst for ARB’s price rally.

A notable conflict is emerging in on-chain trading activities for ARB. On the one hand, the Funding Rate, which tracks the market cohort managing the disparity between spot and futures prices, indicates that buyers (long positions) are driving the market.

As of this writing, the Funding Rate stands at 0.0192%, reflecting bullish sentiment that suggests the market is likely to maintain its upward momentum.

Read Arbitrum’s [ARB] Price Prediction 2024–2025

However, a significant positive Exchange Netflow of ARB has been observed across both daily and weekly timeframes, signaling that market participants are transferring their holdings to exchanges—typically a precursor to selling.

Over the past week, $1.95 million worth of ARB has been moved to exchanges, with $1.44 million transferred in just the last 24 hours. If this trend continues, it could exert substantial downward pressure on the asset, countering the current bullish outlook.