Arbitrum Price Analysis: Will the Falling Wedge Pattern Trigger a Bullish Reversal?

The recovery momentum in the crypto market has witnessed a notable drawdown since last week as Bitcoin struggles to sustain above $70000

The cryptocurrency market experienced increased selling pressure this week, beginning with a significant downturn in Bitcoin from $70,000 to $66,254—a 5% drop. This decline halted the recovery trend among major altcoins and heightened the potential for corrections.

Concurrently, the Arbitrum price analysis indicates a 1.38% decrease today to $0.69, suggesting a significant reversal from crucial resistance.

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Arbitrum Price Analysis: Will the Falling Wedge Pattern Trigger a Bullish Reversal?

The recovery momentum in the crypto market has witnessed a notable drawdown since last week as Bitcoin struggles to sustain above $70000. The overhead supply has sparked a correction in several major altcoins, including Arbitrum.

On July 23rd, the Arbitrum price analysis showcased a sharp reversal from $0.828 resistance, which plunged the asset by 16.8% and hit $0.69. A deeper analysis of the daily chart shows this bear cycle within the formation of a falling wedge pattern.

The pattern’s two converging trendlines, acting as dynamic resistance and support, have led to a downtrend since April 2024. The coin price trading below the daily EMAs (20, 50, 100, and 200) hints that the path to least resistance is down.

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A closer examination of the on-chain metrics for Arbitrum reveals a substantial decline in both active and new users over the past three months.

As per data sourced from Dune Analytics, the number of active addresses on the Arbitrum network has significantly declined over the past three months. From a May peak of 4.01 million, active addresses have decreased to 648.2 thousand, marking an 83.84% drop. A similar downturn is observed in the influx of new users, with the on-chain metric plummeting from 2.7 million to 181.6 thousand—a 93.27% reduction.

This substantial reduction in both active and new users suggests a waning interest or shifting user base, which could impact network activity and influence the valuation of assets within the ecosystem.

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