Arbitrum ($ARB) Price Analysis: Bullish Divergence Hints at Reversal as Altcoin Season Brews

Arbitrum ($ARB), Ethereum’s leading Layer 2 scaling solution, may be on the verge of a trend reversal. According to a recent analysis by popular crypto analyst CryptoBusy on X, a “huge bullish divergence” on the $ARB chart could signal a potential breakout — just as altcoin season gains momentum.

Technical Setup: Bullish Divergence in Play

$ARB has been trading within a descending channel since mid-2024, consistently setting lower lows in price. However, CryptoBusy’s chart reveals a notable bullish divergence on the Relative Strength Index (RSI) — while the token’s price hit a new low, the RSI formed a higher low, signaling waning bearish momentum.

This classic divergence is often a precursor to a trend reversal, as it indicates that sellers are losing strength even as the price continues downward. The chart also identifies $1 as a critical resistance level, reinforcing a prior CCN analysis (Nov 21, 2024) that flagged the same level after an engulfing candlestick pattern and MACD bullish cross — both of which preceded previous uptrends.

If $ARB breaks above the descending channel and clears $1 with strong volume, it could trigger a bullish continuation into the next phase of the market cycle.

On-Chain Strength: Fundamentals Align with Technicals

Arbitrum isn’t just riding on technical signals — its on-chain metrics are equally compelling:

Total Value Locked (TVL): $2.43 billion

Layer 2 Market Share: 45% dominance

Daily Transactions: 2.8 million — over 2.5x Ethereum mainnet throughput

Transaction Costs: Slashed by 85% thanks to the Nitro upgrade

These fundamentals highlight Arbitrum’s growing role in DeFi, gaming, and institutional adoption, creating a solid foundation for $ARB to rally if investor sentiment shifts bullish.

Macro Setup: Altcoin Season in Sight

The timing may also favor $ARB. As Bitcoin dominance flirts with a dip below 54% (Tangem Blog, May 8, 2025), analysts are eyeing the beginning of altcoin season — a phase when capital flows into mid- and small-cap crypto assets. If the trend continues, Layer 2 tokens like $ARB could see increased interest from both retail and institutional players.

Key Levels to Watch

• Support: Mid-channel range (~$0.85)
• Resistance: $1.00 (horizontal and psychological barrier)
• Breakout Signal: Clear RSI divergence + MACD bullish cross
• Volume Confirmation: Essential for sustained upward move

Final Thoughts

While $ARB’s chart suggests an incoming reversal, traders should remain cautious and watch for confirmed breakout signals. Market volatility remains a risk, especially with macro and regulatory narratives still in play. Still, with both technical and fundamental tailwinds, Arbitrum stands out as a token to watch closely in the coming weeks.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. CoinCryptoNewz is not responsible for any losses incurred. Readers should do their own research before making financial decisions.