Arbitrum's ARB token has lost 17.44% of its value over the past week, a decline more pronounced than the weekly performance of major crypto assets and a sign of short-term weakness in the altcoin.
The broader altcoin sector might get a boost if sentiment stabilizes. Bitcoin faces a potentially volatile week as a slew of macroeconomic updates hit markets; if the crypto market can hold on, a turnaround could be around the corner, according to the report.
Arbitrum pulls back to local demand zone
On the one-day chart, the swing structure remained bullish. The rally from $0.131 to $0.255 in September was the latest bullish impulse move on that timeframe, and the drawdown in recent weeks was a pullback within the bullish structure.
Technical indicators reflected the difficulties buyers faced during the correction. The Chaikin Money Flow was below -0.05, signaling aggressive capital outflows and selling pressure, while the Accumulation/Distribution indicator's decline highlighted the same. The Directional Movement Index did not show a strong trend in motion, with the ADX line under 20, but the -DI was at 24, underlining a bearish tilt.
A one-month liquidation heatmap highlighted two local magnetic zones at $0.162 and $0.174. A denser pocket of liquidity sat at $0.205, $0.212 and $0.218, making those levels swing price targets in case of a bullish rebound.
Levels to watch
In the coming days, Arbitrum bulls need to defend the $0.162 local low. A brief dip to or below that level, followed by a rebound back beyond $0.17, would be a good sign that buyers were able to step in and move the price away. A drop below $0.162 without any kind of bullish reaction would signal that the longer-term correction has not yet completed.
The long-term trend was bullish after gains in August and September. Buyers need to show resolve and bring in capital to hold the $0.162 support, the report said.
