Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- ARB headed toward a crucial demand zone.
- Demand and buying volumes in the futures market dipped.
Bitcoin’s [BTC] price action could catalyze Arbitrum [ARB] to retest a crucial demand zone. The king coin faced a price rejection at the range-low of $29.5k, making it a key resistance. Similarly, the weak BTC has given ARB sellers an edge, and a subsequent push toward this demand zone could be on the cards.
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Will the demand zone hold?
For perspective, the demand zone of $1.06 has proven steady in May, late June, and July. However, it was breached in mid-June amidst heightened bearish pressure amidst US regulatory pressure on the crypto market.
Also, Arbitrum’s demand zone is a confluence area with an H12 bullish order block (OB) of $1.06 – $1.12 (cyan). So, bulls are expected to defend the demand zone, so it is a crucial interest level, especially for discounted buying opportunities, targeting the roadblock and H12 bearish OB of $1.29 – $1.37 (red).
However, the demand zone could be breached if BTC registers more losses in the coming hours/days. In such a case, $1.0 and $0.92 are the levels to watch.
The RSI chalked up an overall retreat from the overbought zone to oversold territory. An attempt to cross the neutral level was rejected, reinforcing the sellers’ edge and the idea of a retest of the demand zone.
In addition, the CMF (Chaikin Money Flow) retreated from the negative zone but wavered near zero in the last few hours. It denotes capital inflows for ARB eased after BTC failed to cross the $29.5k mark.
Bearish bias in the futures market
The bearish bias in the spot market was also present in the futures market. The declining buying volumes, as illustrated by dropping CVD (Cumulative Volume Delta), emphasized sellers’ conviction.
How much are 1,10,100 ARBs worth today?
However, Open Interest (OI) rates steadied after declining since mid-July. Moreover, demand dropped in the same period before speculators took to the sidelines to monitor how the market would react to the post-Fed decision.
Although a retest of the demand zone would be an ideal discounted buying level, it will only be worth it if BTC rebounds. Hence, tracking BTC price action is crucial before making moves.