- A metric revealed that Arbitrum was overvalued.
- Technical indicators looked bullish on the token.
Arbitrum [ARB] recently witnessed a price correction, which nullified its last week’s gains. Though the price trend was bearish, investors should not lose hope as ARB showed signs of recovery in the last few hours.
Arbitrum is recovering
CoinMarketCap’s data revealed that ARB gained bullish momentum last week as it reached $1.58 on the 9th of April. However, bears entered the market soon, pushing the token’s price to $1.43 again.
Things started to get better in the last few hours as ARB’s price once again started to move up. At the time of writing, Arbitrum was trading at $1.46 with a market capitalization of over $3.8 billion, making it the 32nd largest crypto.
In fact, Michael Van de Poppe, a popular crypto analyst, recently mentioned in a tweet that he believes L2’s will be doing great on Ethereum [ETH].
Therefore, to see which targets ARB might hit if a bull rally happens, AMBCrypto took a look at Hyblock Capital’s data. Our analysis revealed that ARB’s liquidation will increase substantially once its price reaches $1.63, which can be the immediate next target.
Going further north, if Arbitrum’s bull momentum sustains, then its value might even touch $1.7 and $1.85 in the coming weeks.
Source: Hyblock Capital
Bulls vs bears – who’s winning?
AMBCrypto then analyzed Santiment’s data to see what metrics had to suggest regarding a bull rally for ARB. We found that whale activity around the token remained high last week.
Investors’ confidence in ARB also increased, which was evident from the sharp rise in its total amount of holders.
Additionally, the token’s MVRV ratio also improved, suggesting that ARB might indeed start a bull rally. However, its NVT ratio looked troublesome as it shot up.
A rise in the metric indicates that an asset is overvalued, signaling a possible price correction.
Source: Santiment
Realistic or not, here’s ARB’s market cap in BTC’s terms
Though the NVT ratio hinted at a price drop, technical indicators continued to remain bullish on the token. An analysis of Arbitrum’s daily chart revealed that its Money Flow Index (MFI) went northward.
The Chaikin Money Flow (CMF) also registered an uptick, indicating that the chances of a bull rally were high.
Source: TradingView
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