April 11, 2024 4:50 PM | 2 min read
Popular cryptocurrency trader, Altcoin Sherpa, has expressed bearish sentiments towards Arbitrum (CRYPTO: ARB), predicting a potential drop to $1.20 or lower.
Sherpa recently tweeted his concerns about the “nasty price moves” of the Layer-2 Ethereum (CRYPTO: ETH) scaling solution, suggesting that the coin could potentially consolidate and form a bottom before reaching a low of $1.20.
The analyst also noted the loss of the 200-day exponential moving average (EMA) for ARB, which is a key technical indicator used by traders to determine the long-term trend of an asset. This, combined with Sherpa’s bearish outlook, may signal a potential downturn for the coin.
BitGo, a digital asset trust and security company, recently announced support for Arbitrum, allowing customers to custody the coin in various wallets. Arbitrum is a Layer 2 technology designed to enhance the user experience on Ethereum by improving upgrading services.
According to a tweet by CryptoRank from early April, Arbitrum is currently ranked as the second-best blockchain ($195) by total value locked per unique address. This ratio is calculated by dividing the total value locked (TVL) by the number of unique addresses.
An upcoming upgrade called Stylus on Arbitrum would allow developers to write smart contracts in different programming languages, pending approval from the Arbitrum DAO. However, data from L2BEAT suggests that Arbitrum has been losing market share to rising competitors, despite accounting for 44% of all crypto deposits on Ethereum’s layer 2 blockchains.
Although the future performance of ARB is uncertain, Altcoin Sherpa’s analysis serves as a cautionary perspective for traders and investors to consider.
The influence of Ethereum as an institutional asset class will be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on November 19.
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