Arbitrum (ARB) has experienced a remarkable surge of over 12% in the past 24 hours following its debut on Robinhood, sparking substantial speculative interest. With its market cap now standing at $1.8 billion and trading volume soaring to $400 million within the same period, the coin is making waves in the market.
Despite the significant price hike, technical indicators suggest that ARB is still on a downtrend, although signs indicate that buyers are gradually gaining control.
ARBITRUM DMI Chart Presents a Shift in Buyer Dominance
Upon the news of its listing on Robinhood, Arbitrum’s Directional Movement Index (DMI) chart has displayed notable changes.
The ADX, which assesses trend strength, has slightly decreased from 30.6 to 28.4, signifying a weakening downtrend. Notably, the +DI has surged from 13.5 to 29.3, while the -DI has fallen from 37.3 to 25.2, indicating a rise in buying momentum and a waning selling pressure.
Despite the ongoing downtrend, the recent directional shift hints at a potential reversal if bullish momentum continues to strengthen.
The Average Directional Index (ADX) plays a vital role in gauging trend strength, regardless of direction. An ADX figure above 25 indicates a robust trend, whereas values below 20 imply weak or uncertain market conditions.
With the current ADX at 28.4, ARB’s trend remains definitive, yet the diminishing value suggests a waning downtrend.
As the +DI ascends and the -DI descends, signaling buyer dominance, further confirmation is required for ARB to transition into a full-fledged uptrend. A sustained rise in +DI surpassing the -DI could pave the way for a bullish reversal.
Arbitrum Active Addresses Experience Decline
Despite Arbitrum's recent surge post-Robinhood listing, the number of 7-day Active Addresses on the Arbitrum network has been steadily decreasing since December.
Currently standing at approximately 36,400, a steep drop from the 110,000 active addresses noted on December 7, correlating with ARB's price around $1.23.
While the short-term speculative interest fueled by the Robinhood listing has influenced the price surge, the long-term growth sustainability of ARB could face challenges if on-chain engagement continues to dwindle.
Arbitrum EMA Lines Suggest Potential Uptrend
The ARB price analysis reveals that the coin is still in a downtrend as its short-term moving averages linger below the long-term ones.
Nevertheless, with the recent price upsurge post-Robinhood debut, the short-term lines are showing signs of an upward turn.
If this positive momentum endures, ARB's price could likely test resistance at $0.438, potentially unlocking further upward movement towards $0.466 and even $0.51.
The key determinant for ARB's trajectory will depend on the strength of buying pressure to sustain the ongoing uptrend, potentially altering its prior downward trajectory.
Conversely, a failure to maintain bullish momentum may lead to a resumption of the downtrend, potentially retesting the $0.38 support level. A breach of this level could signal renewed weakness, pressing the price towards $0.349 and below, instigating a pessimistic outlook for ARB.