Benzinga - by Khyathi Dalal, Benzinga Staff Writer.
Altcoin Sherpa, a popular pseudonymous cryptocurrency trader, has expressed bearish sentiments towards Arbitrum (CRYPTO: ARB), expecting the price to drop to $1.20 or lower.
What Happened: Sherpa expressed concern over the “nasty price moves” of the Layer-2 Ethereum (CRYPTO: ETH) scaling solution. He suggested that the cryptocurrency might be heading towards a value of $1.20 or lower and indicated his desire for the coin to “consolidate and chill” before forming a bottom.
The analyst also noted that the loss of the 200-day exponential moving average (EMA) for the coin is a negative sign, implying that the coin “might nearly retrace the entire move.”
The 200-day EMA is a key technical indicator used by traders to determine the long-term trend of an asset, and a loss of this level often signals a bearish trend.
Also Read: Robinhood Partners With Arbitrum Blockchain To Simplify Crypto Swaps
Why It Matters: BitGo, a digital asset trust company and security company, recently announced its support for Arbitrum, allowing customers to custody the coin in hot, custodial, and cold wallets. Arbitrum is a Layer 2 technology designed to improve upgrading services by enhancing users’ ability to explore and develop on Ethereum.
According to a tweet by CryptoRank from early April, Arbitrum is the second-best blockchain ($195) by total value locked per unique address, which is calculated by dividing the total value locked (TVL) by the number of unique addresses.
announced the embracing of Arbitrum where customers can custody the coin in hot, custodial, and cold wallets. Arbitrum is a Layer 2 technology created to improve upgrading services by strengthening users' ability to scour and develop in Ethereum.
Notably, an early April tweet by CryptoRank indicates Arbitrum as the second-best blockchain ($195) by total value locked per unique address. The 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 Rust and other popular programming languages, pending approval from the Arbitrum DAO. However, data from L2BEAT indicates that while Arbitrum accounted for 44% of all crypto deposited on Ethereum’s four dozen layer 2 blockchains, it has been losing market share to rising competitors.
Although the future performance of ARB remains uncertain, Altcoin Sherpa’s analysis offers a cautionary perspective for traders and investors to consider.
What's Next: The influence of Ethereum as an institutional asset class is expected to be thoroughly explored at Benzinga's upcoming Future of Digital Assets event on Nov. 19.
Read Next: ‘This Is Crazy:’ Ethereum Advocate In Disbelief About Dogwifhat’s Outperformance Over Blockchain’s ‘Real Verifiable Cash Flows’
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