Crypto analyst Ali Charts has identified a TD Sequential buy signal for Arbitrum's ARB token on the 12-hour chart, suggesting a potential price reversal. The signal, which appears after nine consecutive red candles, indicates selling pressure may be peaking and historically for ARB has preceded rallies of 10% to 30%.
This technical development comes as ARB faces significant market pressure. The token has dropped over 15% in a week, breaking below its multi-month support range from November 2025. At press time, ARB was trading near $0.18, approximately 88% below its all-time high of $2.40, with key support at $0.17.
Despite the price decline, on-chain data shows a surge in capital inflows. On January 23, $17 million flowed into Arbitrum's native bridge, marking a 14.66% daily surge in bridge volume. This suggests institutional players may be positioning for a potential recovery. Furthermore, data from CryptoQuant reveals whale orders clustering around the $0.17 price dip, indicating large investors are accumulating at these lower levels.
The technical picture presents a mixed outlook. While the TD Sequential and an RSI reading of approximately 30.57 on the seven-day chart suggest oversold conditions and potential for a bounce, the MACD indicator shows weakness, pointing to further downside risk. For a bullish reversal to be confirmed, analysts state ARB must decisively break above the psychological resistance level of $0.21, which aligns with the 7-day Simple Moving Average. A breakout could target $0.24 (the 50-day moving average), representing a 26% gain. Conversely, a loss of the $0.17 support on significant volume would invalidate the bullish setup and expose a drop to $0.15.
Fundamental challenges persist for ARB's value capture. Despite Arbitrum being the leading Ethereum Layer-2 by Total Value Locked (TVL) with over $2.6 billion, its governance token does not directly benefit from network growth as it is not used for gas fees. Recent ecosystem developments, such as JasmyChain's migration to the Arbitrum Orbit network, have not translated to price momentum. Additionally, impending token unlocks continue to create supply-side pressure on the market.
Broader market conditions remain a headwind, with the Fear & Greed Index at 34 (Fear) and the Altcoin Season Index at 31, indicating a "risk-off" attitude where capital is focused on Bitcoin and large-cap assets rather than speculative altcoins like ARB.
