Arbitrum Price Dips: $0.60 Support at Risk Amid Low User Activity

Arbitrum Price Analysis: Falling Wedge Pattern and Declining User Activity

Arbitrum price analysis signals bearish trends amid a falling wedge pattern formation. The network has experienced a significant drop in user activity, with active addresses decreasing by 83.84% and new users falling by 93.27%, which has impacted the overall dynamics and valuation of the network’s assets.

Highlights

• A falling wedge pattern drives the current downtrend in ARB price.
• Data from Dune Analytics reveals a significant decline in the Arbitrum network’s user engagement that could negatively affect network dynamics and asset valuation.
• The intraday trading volume in ARB is $135 million, indicating a 24% loss.

The cryptocurrency market experienced an increase in supply pressure this week, beginning with a sharp downturn in Bitcoin from $70,000 to $66,254—a 5% drop. This decline halted the recovery trend across most major altcoins and heightened the potential for corrections. Concurrently, the Arbitrum price analysis indicates a 1.38% decrease today to $0.69, suggesting a significant reversal from crucial resistance.

Arbitrum Price Analysis: Will the Falling Wedge Pattern Trigger a Bullish Reversal?

The recovery momentum in the crypto market has witnessed a notable drawdown since last week as Bitcoin struggles to sustain above $70,000. The overhead supply has sparked a correction in several major altcoins, including Arbitrum.

On July 23rd, the Arbitrum price analysis showcased a sharp reversal from $0.828 resistance, which plunged the asset by 16.8% and hit $0.69. A deeper analysis of the daily chart shows this bear cycle within the formation of a falling wedge pattern.

The pattern’s two converging trendlines, acting as dynamic resistance and support, have led to a downtrend since April 2024. The coin price trading below the daily EMAs (20, 50, 100, and 200) hints that the path of least resistance is down.

As per data sourced from Dune Analytics, the number of active addresses on the Arbitrum network has significantly declined over the past three months. From a May peak of 4.01 million, active addresses have decreased to 648.2 thousand, marking an 83.84% drop. A similar downturn is observed in the influx of new users, with the on-chain metric plummeting from 2.7 million to 181.6 thousand—a 93.27% reduction.

This substantial reduction in both active and new users suggests a waning interest or shifting user base, which could impact network activity and influence the valuation of assets within the ecosystem.

If bearish momentum persists, the Arbitrum price analysis shows a 16% downside risk to retest $0.565 support, followed by $0.46.

On a contrary note, the falling wedge pattern is now a bullish reversal pattern that could bolster buyers to challenge the overhead trendline. A potential breakout could accelerate buying momentum and push the asset back to $0.24.