Arbitrum (ARB) Could Be Destined to Stay Above $1, Here’s Why
- Liquidity on the Arbitrum ecosystem has increased since the STIP grant to several projects.
- ARB may reach $1.20 if the RSI reading crosses 65.00.
- The MACD indicated that ARB may retrace, so traders may need to refrain from long positions.
The price of Arbitrum (ARB) in the last seven days has grown by 15.56%, according to data from price tracking platform CoinMarketCap. While the growth may be connected to the rising tide of altcoin prices of late, there are also some underlying factors that have kept ARB on the upside.
For one crypto researcher known as Emperor Osmo, ARB’s increase was connected to Arbitrum’s Short-Term Incentive Program (STIP). In October, Arbitrum announced that it was giving a number of project short-term grants.
STIP Pushes the Recovery
After a period of screening, applicant projects including GMX, Gains Network (GNS), and 27 others won a share of the program’s funding. According to Osmo, the program has been vital to the jump in liquidity in the Arbitrum ecosystem.
At some point, tokens operating under the Arbitrum protocol were illiquid as they were starved of swap and activity. But since the STIP announcement, the volume has picked up for tokens including GMX.
Also, ARB’s value, which has lingered below $1 for a long time, recently broke through the crucial psychological resistance markt. At press time, ARB’s price was $1.08. According to the ARB/USD 4-hour chart, there was a struggle between bulls and bears as to what direction ARB should move in next.
However, the Relative Strength Index (RSI) showed that buyers commanded a much greater presence than. At the time of writing, the RSI reading was 61.26. Signals from technical indicators also showed that the reading could go higher.
Watch Out for These Indicators
Should the RSI move to 67.00 thereabout, then ARB may have a stop at $1.20. At the same time, traders need to watch out if the indicator hits 70.00 or rises above it. Should this happen, ARB may retrace. However, it is unlikely for the token to trade below $1 for the short term considering the thriving narrative around it.
Meanwhile, the Moving Average Convergence Divergence (MACD) was down to -0.024. In this case (as displayed above), traders need to be careful about opening a long position.
Another metric to consider around Arbitrum is the Total Value Locked (TVL). According to DeFiLama, Arbitrum’s TVL was $1.89 billion. This value represents a 7.73% increase in the last seven days. The TVL measures the value of assets locked in a protocol. When it decreases, it implies a fall in liquidity deposited to the protocol.
On the other hand, an increase like in Arbitrum’s case means market players trust the protocol enough to put in more liquidity.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
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