Arbitrum (ARB) Chart Analysis & Potential Trade Setup

22 sept

It's time for some more chart analysis! Today, I take a closer look at Arbitrum and try to find out if the token offers a promising trade setup. Let's dive in 👇

1️⃣ Current Chart Situation
• Arbitrum (ARB) broke out of its long-term downtrend in early September after forming a double bottom at ~$0.48.
• While technically out of the downtrend, two critical elements are still missing: a more robust pump and significant volume increase. This makes it hard to call it a confirmed breakout just yet.
• Moreover, the volume has been declining throughout the entire downtrend. Unfortunately, we haven’t seen a decisive reversal in this trend.
• ARB is currently battling the $0.60 resistance level, which has been rejected so far.

2️⃣ Trade Setup
If ARB breaks above the $0.60 resistance, a potential long entry could be in play, targeting a move above $0.80. However, I’m cautious about entering without a solid volume confirmation.

So, here’s how I would approach this trade:
• Entry: After a daily close above $0.62, but ONLY if the breakout is accompanied by high volume.
• Stop Loss: Around $0.58 to manage risk.
• Target: $0.82, offering a profit potential of ~34%.
• Risk/Reward Ratio: Over 6, making this a solid trade if volume supports it.

❌ Without the volume confirmation, the risk remains too high, and I would not consider entering. Always prioritize risk management!