ARB, the native token of the Arbitrum network, has faced some turbulence recently. After a significant drop of 14.28% over the past month, many investors are wondering if the token will continue to struggle or if it’s primed for a recovery. Despite the challenges, there are strong signals suggesting that ARB could regain its bullish momentum and climb back to $1.5, provided the right conditions fall into place.

The Bullish Cup and Handle Pattern

At the moment, ARB is showing a promising technical setup known as the “cup and handle” pattern. This formation is often a precursor to a strong upward movement. In technical analysis, the cup and handle pattern indicates a period of consolidation followed by a potential rally, and ARB’s chart currently fits this description.

The cup represents a rounded bottom, while the handle is a small consolidation before the asset breaks out to the upside. For ARB, the expected rally from this pattern could see the price rising to at least $1.5, a level that has been a significant point of resistance in the past.

However, before ARB can experience this upward movement, it’s likely to face some short-term challenges. The price is still in search of a solid demand zone, a key support area where buy orders are expected to provide the necessary momentum for a rebound. Based on current market analysis, the demand zone for ARB is expected to be between $0.74 and $0.659. Once ARB reaches this zone, the price is expected to find stability and potentially begin a climb toward the $1.5 mark.

Whale Activity and Its Impact on ARB’s Price

Whales—large holders of ARB—are likely to play a crucial role in driving the token’s recovery. Whale activity often influences the price of assets like ARB, especially when key support levels are reached. According to the IOMAP (In/Out of the Money) data, a large number of addresses—around 13,200—hold 320,000 ARB in a profitable range, known as the “In the Money” zone. This region is crucial because it represents a significant area of support. As ARB approaches this level, the buying pressure from these addresses could help propel the price upward.

Despite this, the overall market sentiment around ARB is still mixed. Data from the Bull-Bear ratio, which compares the number of bullish versus bearish whales, shows that bearish whales currently outnumber bullish ones. In fact, the ratio reveals that 49% of whales are currently bearish, compared to 39% who are bullish. This imbalance suggests that bearish sentiment may be pushing ARB lower as whales seek to accumulate more tokens at favorable prices before re-entering the market.

The Role of Market Sentiment and Derivative Traders

While whales may be contributing to the downward pressure on ARB’s price, there is another factor at play: derivative traders. According to Coinglass, ARB’s funding rate has increased to 0.0097% over the past 24 hours, placing it in positive territory. A positive funding rate indicates that long derivative traders—those betting on ARB’s price to rise—are dominating the market. This is a positive sign, as it suggests that the sentiment around ARB remains bullish overall.

The increase in derivative activity could provide the necessary support for ARB as it enters its demand zone. This influx of long positions could help stabilize the price and set the stage for a recovery. A positive funding rate typically indicates that traders are confident in the asset’s potential for upward movement, which could provide the momentum needed for ARB to break through key resistance levels.

The Path Forward for ARB

As ARB approaches the critical demand zone, the next few days will be crucial for determining its price trajectory. If ARB can hold the support levels and buying pressure continues to rise, the token could experience a significant rebound. The bullish cup and handle pattern, combined with the demand zone and whale activity, creates a strong case for a potential rally.

However, there is still some risk involved. If the bearish sentiment among whales persists, ARB may struggle to find the necessary support to move higher. In this case, the price could remain stuck in a range or even decline further.

Ultimately, the future of ARB hinges on its ability to find stability at the key demand zone and whether whales shift their sentiment toward a more bullish outlook. If the conditions align, ARB could once again climb to $1.5, offering investors a promising return.