Is Arbitrum (ARB) a hidden gem or a scam?
Hello Skyrexians!
Something bad has been happening in the crypto market over the past couple of weeks. It dumps heavily, especially altcoins. Most of the top crypto traders have been waiting for the altseason for quite a long time, but the result turned out to be the opposite. Major exchanges have delisted some tokens that immediately fall below critical levels, cryptocurrency trading strategies are facing huge losses, most automated trading bots are also damaging deposits, even a grid trading bot received a stop loss due to the price falling below the price range. In such challenging times, it is vital to choose the best assets to invest your money. Finding such altcoins is also important for automated cryptocurrency trading because it requires sufficient liquidity. Today we will try to understand whether ARB is such an asset or not by providing multi-timeframe analysis using different indicators.
Arbitrium weekly analysis – what do Elliott waves mean?
Almost all profitable cryptocurrency trading strategies rely on Elliott waves to at least confirm trading decisions. In Chart 1W we see that the first bullish impulse clearly ended at $2.43. In my opinion, most traders now think that the game is over because the current dump has almost reached the bottom of wave 1, but waves 2 can retrace to 100% of wave 1, especially for small cap altcoins. The EPIRB is not the bottom yet, but the bottom is near.
If this assumption is correct, then the asset is about to enter impulse wave 3, which has a minimum target at $2.56, most likely at $3.58 and a bullish target at $5.23. Of course, this is not the end goal for the entire bull market if it happens, but only for wave 3. An extended wave 5 could easily double all of these goals, but it is too early to talk about it now.
Arbitrum daily analysis – reversal here?
In the chart below we can see ARB on the 1D timeframe. We see that wave 2 has more of a zigzag ABC structure where wave C is about to end.
The stunning oscillator tells us that the bullish divergence between wave 3 and 5 inside wave C is almost complete. Only a big drop can break it. To confirm a reversal, we need a bullish reversal bar and three consecutive green bars on the AO histogram. It would also be nice to see a squat bar on the MFI instead of the green one we see now. The green bar tells us that the bears are still strong, the dump is not finished yet, it is better to wait for confirmation.
Does the 4 hour chart tell us that the bearish phase is over?
Let’s also look at the 4-hour time frame. Remember our educational article on Elliott waves, where we talked about waves within waves. This chart looks inside wave 5 in C. This wave also consists of 5 waves and we have some evidence that this trend is almost over.
First of all, pay attention to how accurately the price hit the wave 3 target at the 1.61 Fibonacci level. Wave 4 rolled back to the target zone and now the price has printed a bullish divergence from AO. This is still not confirmed as a bullish reversal bar that could potentially form anytime soon, but the MFI is showing us two consecutive squat bars. This means that it is difficult to go lower and there is a huge battle between the bulls and bears. Now we’re ready to pivot!
Conclusion
Of course, most traders are losing money now because no one believes in Bitcoin, but most of them were in altcoins. But now, as I see, there is a huge disappointment in the market. People say it’s over, there’s a huge bear market ahead. We believe that it is during such frustrating times that the greatest opportunities come to market. Be patient, control your risk and be happy.
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