Arbitrum (ARB) has advanced more than 10% in the last twenty-four hours, rising from $1.11 to a high of $1.27. The current price of ARB stands at $1.20, and for now, bulls continue to control the price movement.
But where is the price of Arbitrum (ARB) going next, and what can we expect from the second quarter of 2023?
Today, the Crypto Lists site will discuss Arbitrum (ARB) price estimates from a technical and fundamental analysis perspective.
Please note that there are also many other factors to consider when entering a position, such as your time horizon, willingness to risk, and how much margin you have if trading with leverage.
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- 1 Faster speed at a much lower cost
- 2 Investors should take defensive approach in Q2
- 3 Technical analysis for Arbitrum (ARB)
- 4 Important support & resistance levels for Arbitrum (ARB)
- 5 What speaks for the rise in the Arbitrum (ARB) price
- 6 What indicates the downfall of Arbitrum (ARB)
- 7 What do analysts and experts say?
Faster speed at a much lower cost
Arbitrum is an Ethereum layer-two (L2) scaling solution that provides faster speeds at a significantly lower cost, with the same level of security as Ethereum. While Ethereum manages a mere 14 transactions per second, Arbitrum races ahead at 40,000 transactions per second. Transactions cost several dollars to complete on Ethereum, while they cost about two cents on Arbitrum.
Arbitrum uses optimistic rollups to achieve its goal of improving speed, scalability, and cost-efficiency while it derives its security from the Ethereum network, which provides consensus and finality for Arbitrum transactions. In other words, Ethereum guarantees the validity of the rollup’s off-chain computation and data availability behind the computation.
Arbitrum supports unmodified EVM contracts, and it allows developers to deploy programs written in popular programming languages like Rust, C++, and more using Stylus, its upcoming EVM+ equivalence feature. Arbitrum’s native token is called ARB, and this token allows ARB holders to vote on proposals that affect the features, protocol upgrades, and funds allocation.
ARB does not work as a gas fee token, and the fees on Arbitrum are paid in ETH or any other ERC-20 token supported by DApps. This means that ARB holders do not need to spend their tokens to use Arbitrum services but rather can stake them and earn fees for securing the network.
The price of this cryptocurrency is advancing this week, and investors should keep in mind that Arbitrum is a very promising project, and the price of ARB could be supported in the future. The team of Arbitrum reported:
“Arbitrum has an ambitious roadmap for 2023, which includes: Launching its own layer-three solution called Orbit; Enabling developers to deploy programs written in popular programming languages like Rust, C++, and more using Stylus; Expanding its validator set to include more independent institutional validators; Moving its protocol to layer two with Arbitrum One.”
Investors should take defensive approach in Q2
Arbitrum currently has nearly four million users with a vibrant ecosystem of DApps, wallets, tools, and partners that make it one of the leading scaling solutions for Ethereum. If the popularity of this project continues to grow, the price of ARB could increase above the current levels; still, investors should consider that if the price of Bitcoin falls again below the $25000 support, that will negatively influence ARB.
Investors should continue to take a defensive investment approach in the second quarter of 2023 amid expectations of “some market turbulence” from looming recession concerns and macro uncertainty. There are fears that the U.S. central bank will keep interest rates at restrictive levels for a longer period, and many analysts expect a global recession that could hit financial markets again.
According to the World Bank, global growth this year is expected to decelerate sharply, reflecting synchronous policy tightening aimed at containing very high inflation, worsening financial conditions, and continued disruptions from Russia’s invasion of Ukraine. George Saravelos, global head of foreign-exchange research at Deutsche Bank AG, added:
“The overall message for 2023 seems clear: central banks will push back on higher risky assets until the labor market starts to turn.”
At the same time, the U.S.-based regulators continue to pressure crypto firms, and the United States Commodity Futures Trading Commission (CFTC) presented a lawsuit against Binance and its CEO Changpeng Zhao this week. The lawsuit alleges that Binance offered derivatives to U.S. customers without a license which spooked investors again.
Technical analysis for Arbitrum (ARB)
Arbitrum (ARB) has advanced more than 10% since March 28, 2023, rising from $1.11 to a high of $1.27. Despite the current correction, bulls still control the price movement, and as long the price of ARB is above $1.18, we can’t talk about a trend reversal.
Important support & resistance levels for Arbitrum (ARB)
On this chart (the period from March 24, 2023), I marked important support and resistance levels that can help traders to understand where the price could move. According to technical analysis, bulls control the price movement of ARB for now, and if the price advances above $1.3, the next target could be resistance that stands at $1.4.
The important support level is $1.15, and if the price breaks this level, it would be a “SELL” signal, and we have the open way to $1.10. If the price drops below $1.10, which represents very strong support, the next target could be located around $1 or even below.
What speaks for the rise in the Arbitrum (ARB) price
The amount of ARB traded over the last twenty-four hours saw a significant increase, and if the price advances above $1.3, the next target could be resistance at $1.4. Traders are buying ARB despite the expectations of “some market turbulence,” and according to the technical picture, ARB still has room for the upside.
Traders should also consider that the price of ARB is correlated with Bitcoin, and if the price of Bitcoin jumps above $30,000, we can see this cryptocurrency at a higher price level than the current price.
What indicates the downfall of Arbitrum (ARB)
The price of Arbitrum (ARB) is currently trading above $1.20, but a break below the $1.18 level would indicate that ARB could probably test the important support level that stands at $1.15.
The highly volatile nature of the cryptocurrencies may scare investors again to sell ARB if some negative news happens in the cryptocurrency market, like a bank with large crypto exposure collapsing or a prominent crypto firm going bankrupt.
Investors should also consider that as long as the U.S. economy is not in a recession, the prices of Arbitrum (ARB) and other cryptocurrencies could be supported.
What do analysts and experts say?
Arbitrum (ARB) is advancing this trading week, but investors should keep in mind that the macroeconomic landscape remains uncertain. Major central banks continue with an aggressive stance to fight inflation by raising interest rates, and risk-on assets such as cryptocurrencies could suffer again in such conditions.
The U.S. stock market could experience losses over the coming months, and investors should consider that the crypto market displayed a high correlation with U.S. equities.
Many analysts are warning that Fed will hold interest rates at restrictive levels for longer, and according to IBES data from Refinitiv, analysts now expect S&P 500 earnings to fall more than 3% in the second quarter compared to their year-ago periods. The federal funds rate is now in a range of 4.75% to 5%; there’s a general expectation of a contraction in the economy, and it will impact corporate earnings and financial markets.
Ki Young Ju, the CEO of the cryptocurrency analytical service CryptoQuant.com, said that macro risks and contagion still prevail in the crypto industry, and the rising risks of further liquidations, bankruptcies, etc., could lead again to a spike in selling pressure.
Disclaimer: Crypto is extremely volatile and not suitable for everyone to invest in. Never speculate with money that you cannot afford to lose. The information on this site is presented for educational purposes only and should not be construed as investment or financial advice.