Arbitrum (ARB), the popular Layer 2 solution for Ethereum, has seen a significant price surge following its recent listing on the Robinhood platform. The ARB token spiked by 12%, rising from $0.378 to $0.435, before easing slightly. This surge comes after a period of steady decline, during which ARB lost around 65% of its value from its December highs of $1.20. As the token begins to recover, investors are eager to know whether this boost can lead to a sustainable price increase or if it will fizzle out like previous rallies.

Robinhood Listing Brings New Liquidity and Visibility

The listing of ARB on Robinhood has opened up a new avenue of liquidity for the token. Robinhood, with its vast user base, has been a significant player in increasing the visibility of many cryptocurrencies, and the inclusion of Arbitrum’s token has brought fresh attention to the project. The sudden surge in price reflects the excitement from retail investors who now have easier access to the token.

However, despite the 12% bounce, the token remains well below its peak, down 65% from its December 2023 highs of $1.20. This raises the question of whether the recent rally is just a brief spike or if ARB can sustain its upward momentum in the long term.

Bullish Divergence Signals a Potential Price Reversal

A key technical signal for ARB’s potential recovery lies in the formation of a bullish divergence on its daily chart. A bullish divergence occurs when an asset’s price makes lower lows, but its relative strength index (RSI) rises. This is often seen as an indicator that a trend reversal could be on the horizon.

In ARB’s case, the price has been making lower lows, yet the RSI has been trending upwards. This suggests that despite the recent price drop, there could be increasing buying pressure building behind the scenes. If this pattern continues, it could set the stage for further price gains, and ARB might experience a more sustained recovery.

Reduced Sell Pressure Points to Recovery Potential

One of the most important factors contributing to ARB’s price surge is the reduced sell pressure on exchanges. According to Coinglass data, around $7 million worth of ARB was withdrawn from exchanges in just one week. In total, over $20 million worth of ARB has been moved off exchanges in the past three weeks. This decrease in netflows (the difference between deposits and withdrawals) suggests that fewer investors are looking to sell their tokens, which is typically a positive sign for any asset.

Interestingly, a group of large ARB holders, known as whales, has been actively accumulating tokens. Whale groups holding between 100 million and 1 billion ARB have increased their holdings from 1.96 billion ARB to 2.06 billion ARB in just a few days. This 40 million ARB accumulation by these whales indicates that large investors are betting on a price rebound.

On the other hand, some selling pressure still remains from whale holders with smaller amounts, between 10 million and 100 million ARB. If these smaller whale holders continue to sell, it could dampen the short-term outlook for ARB. Nonetheless, the strong accumulation by larger whales offers a more positive long-term outlook for the token.

Resistance Levels and Market Sentiment

Despite the bullish divergence and growing accumulation, ARB faces a key resistance level near the $0.50 mark. This resistance was once support during late 2024 but was recently breached, making it a critical level to watch. If ARB can break decisively above $0.50 and hold that level, it could solidify its recovery and signal a more sustained upward trend.

However, investors should remain cautious as broader market sentiment plays a crucial role in the price movements of all cryptocurrencies. If the overall crypto market takes a downturn, ARB’s price could face additional downward pressure, regardless of the positive signals on the chart.

Conclusion

Arbitrum’s recent surge in price following its Robinhood listing highlights growing interest in the Layer 2 solution. The reduction in sell pressure, along with a bullish divergence on the chart and increased whale accumulation, suggests that ARB has the potential to continue its recovery. However, the token must break through key resistance levels and maintain positive market sentiment to sustain its upward momentum. As the market evolves, investors will need to keep an eye on these developments to assess whether ARB can fully reverse its 65% decline from December’s highs.