Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- ARB’s lower and higher timeframe charts were bearish at press time.
- Open Interest rates improved slightly over the weekend.
Like the rest of the altcoin market, Arbitrum [ARB] has made losses in the second half of August. The downtrend cracked the $1 psychological level. The lower and higher timeframe market structures were flipped to a bearish bias. At press time, a shorting opportunity with modest gains was likely.
How much are 1,10,100 ARBs worth today?
Will the recovery falter and favor sellers?
Source: ARB/USDT on TradingView
A Fibonacci retracement tool (yellow) was plotted between the August high and low. The 23.6% Fib level of $0.982 was a crucial support but was flipped to resistance. At the time of writing, price action edged higher towards the resistance level.
With a weak BTC, a price rejection at the 23.6% Fib level could present a shorting opportunity with modest gains. The take-profit could be set at $0.921 and the entry position at $0.982.
A candlestick session close above $1.0 will invalidate the above short set-up. Such an upswing could tip ARB to target $1.02 and $1.06.
Meanwhile, the Relative Strength Index (RSI) remained below 50 in the second half of August, denoting muted buying pressure. At press time, it approached the 50-mark and likely rejection could signal a price reversal.
The Chaikin Money Flow (CMF) was below the threshold, confirming capital outflows and cementing a likely short-play thesis.
Open Interest rates improved slightly
Source: Coinglass
Since Friday, 25 August, the Open Interest (OI) rates slightly improved. It jumped from $103 million on Friday to around $111 million on 27 August. The uptick demonstrates improved demand for ARB in the derivative markets over the weekend.
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However, more short positions have been wrecked in the last 24 hours before the time of writing, as per Coinglass’s liquidation data. So, tracking Bitcoin [BTC] price movement is crucial before shorting the altcoin.