Analysis has explained how Arbitrum could see an increase of about 46% if its price breaks out of this technical analysis pattern.
Arbitrum has been trading within a descending triangle recently
In new mail on X, analyst Ali Martinez has discussed a descending Triangle pattern forming in the 4-hour Arbitrum price. The “Descending triangle” refers to creation from technical analysis (TA) which, as the name suggests, looks like a descending triangle.
The pattern consists of two movement lines between which the asset consolidates: a high level drawn by connecting lower highs in price together and a lower one parallel to the axis -time that binds the coins. As with many other TA patterns, the upper line is considered a potential resistance point for the price, while the lower one can be a support.
A break out of one of these lines can mean a continuation of the trend in that direction. An escapeabove the triangle is naturally a bullish signal, and a fall below it can predict a bearish result.
Similar to the Descending Triangle, there is another pattern known as the Ascending trianglewhich forms when the consolidation occurs towards a complete upside.
Now, here is the chart shared by the analyst that shows the Descending Triangle that Arbitrum's 4-hour price has been trading within for the past couple of months :
As shown in the graph above, Arbitrum's 4-hour price reconfirmed the high of the Descending Triangle a few days ago, but found refuse as it has fallen since then.
Yesterday, the coin saw a brief retest of the bottom line, but it seems that this level also holds for the digital currency as its price has recovered from it.
These levels will likely not last long, however, as ARB is teetering near the top of the triangle. As the range becomes narrower, the chances of breaking out (in either direction) become higher.
At the moment, Arbitrum is trading right in the middle of the two levels, so it is not sure which one it would travel next. Martinez notes that if the break occurs towards the upside, the cryptocurrency could end up increasing by around 46%. This figure is based on the fact that the height of the triangle includes a price movement of this percentage.
Whether or not ARB would be able to detect a break above the Descending Triangle remains to be seen.
ARB price online
At the time of writing, Arbitrum is trading around $0.72, up 1% over the past 24 hours.
