On June 2, the price of Arbitrum, a cryptocurrency, surged along with other leading cryptocurrencies. This comes after the US Senate voted to increase the debt limit.
WHY ARB PRICE UP?
The price of Arbitrum (ARB) jumped 9% to an intraday high of $1.25, beating the overall crypto market gain of 1.5% over the same period.
Arbitrum’s out-of-the-box activity coincided with some odd buying activity involving prominent trader Andrew Kang’s crypto addresses.
Notably, on June 2, the Mechanism Capital co-founder deposited $1 million worth of stablecoins into the Arbitrum pool and spent more than 20% of it buying RDNT, the native token of the non-financial lending platform. Focused Radiant Capital.
Andrew Kang exchanged his existing RDNT and RDNT reserves for $867,000 worth of ARB on the Arbitrum platform. He then sent this money to Radiant Capital to borrow Circle’s USD Coin (USDC).
Lookonchain notes:
Looks like Andrew Kang is using leverage to buy ARB on @RDNTCapital. Buy ARB → Deposit ARB → Borrow USDC → Buy ARB.
IS THE ARB Rally SUSTAINABLE?
Lookonchain reveals that an anonymous whale deposited $1.5 million worth of ARBs on the OKX exchange
Investors often deposit tokens into crypto exchanges for sale, and this could create retracement pressure on ARBs if demand dips. A drop in demand could lead to a drop in the price of ARB in the coming days. Plus, the technical setup on the daily chart shows a similar trend.
ARB is currently showing a bear flag on the daily chart. This is confirmed by a consolidation between two parallel uptrend lines, following a previous sharp drop. A bear price pattern usually lasts only until the ARB price breaks below the lower trendline and drops to a level equal to the length of the previous drop.
ARB is trading at current prices and has the prospect of a drop to around $0.95 in June, which is about 20% off current prices.
If a breakout occurs above the upper trendline of the bear pattern, this could invalidate the bearish outlook and place the ARB above the line towards the $1.35 price point. This is the resistance level from the trading sessions between March and May 2023.
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