Arbitrum (ARB) Shows Signs of Recovery Amid Strong Fundamentals and Technical Accumulation

Arbitrum (ARB) is trading near $0.20 after a sharp weekly decline, but analysts are identifying early signs of stabilization in both technical structure and ecosystem fundamentals. Despite weak sentiment, ARB's compression around the $0.20 support level is drawing speculative interest.

Fundamentally, Arbitrum remains solid with rising DEX volume, strong Total Value Locked (TVL), and steady ecosystem activity, a disconnect that suggests the token may be undervalued amidst broader market risk-off sentiment. On-chain activity and a tightening falling-wedge structure highlight growing recovery potential. The price is currently near the lower boundary of this wedge around $0.21. A breakout above the upper trendline near $0.24-$0.25 would signal a potential shift towards recovery.

Weekly charts reveal long-term Bollinger Band compression, historically a precursor to volatility expansions. ARB's price sits at the lower band with diminishing sell volume, conditions typical of an accumulation phase. Momentum indicators show ARB approaching oversold territory. Analyst Luci outlines a multi-month accumulation box from roughly $0.18 to $0.26. If ARB maintains support and reclaims the mid-band near $0.22, the price could target $0.28–$0.30, with a potential extension towards $0.55–$0.60 over the next one to two months if momentum returns.

Short-term, a critical support zone exists between $0.19 and $0.194. A break below risks new lows towards $0.185–$0.190. However, a rebound from this support could lead to a corrective bounce towards $0.205, $0.215, and $0.225, though these levels align with previous supply blocks that will require significant volume to overcome.

Market dynamics support the recovery narrative. The network recorded $25.8 billion in net inflows over the past three months, placing it ahead of other ecosystems like Ethereum Mainnet, Polygon PoS, and Avalanche C-Chain, which faced outflows. As of the report, ARB trades at $0.2170, posting a weekly gain with market cap up over 12% and daily volume up more than 37%.

Leverage conditions have calmed significantly since a volatile event in early October. Liquidation data from Coinglass shows a major spike in long and short liquidations in October, aligned with a sharp price adjustment. Since then, liquidation levels have eased through November as traders reduced leverage, suggesting a market preparing for new catalysts with lower risk exposure.