On January 3rd, the cryptocurrency market experienced a sharp decline, with most major cryptocurrencies falling in value. Bitcoin, the leading digital currency, took a significant hit, dropping by 6-7% to the $43,000 level. This downturn is believed to be a reaction to the potential rejection of the SPOT Bitcoin ETF by the US SEC, a concern recently highlighted by digital financial services platform Matrixport.
Despite the widespread sell-off, Ethereum‘s Layer 2 scaling solution Arbitrum (ARB) displayed extraordinary resilience, reclaiming and surpassing the critical $1.82 threshold. This level is not only a recovery point but may also indicate a reversal of the bearish trend, known as a “rounded bottom” breakout.
ARB’s intraday trading volume hit $2.47 billion, marking a 110% increase. The token’s recovery trajectory began in late October, starting from a low of $0.76, and has since shown an impressive 140% rise to its current trading price of $1.85. According to DefiLlama, Arbitrum’s Total Value Locked (TVL) in the network reached a new record of $2.5 billion on Wednesday, suggesting growing investor interest and anticipation of a significant recovery in 2024.
Amidst this rise, the formation of a bullish reversal pattern suggests a strong potential for further gains and persistent investor accumulation. Despite the general market downturn on January 3rd, which briefly pushed ARB’s price down to $1.46, buyers quickly responded, pushing the price above the $1.82 threshold. Sustaining above this level could confirm a rounded bottom breakout and early signs of trend recovery, potentially extending ARB’s price recovery by 60% to targets between $2.91 and $3.
The current market sentiment appears positive for ARB, but a close below the $1.82 level could signal a delayed recovery and allow sellers to initiate further price corrections. As Matrixport cautions, a decision by the US SEC against the Bitcoin spot ETF could validate this bearish scenario. In such a case, ARB could find support at lower price levels, particularly around $1.47 and $1.25.