Hypothesis

Considering we had the potential for some significant downside on ARB with the negative fundamental catalyst, this held up pretty strong, above some important key technical price points, which we wanted to see to continue to back ARB for the cycle.

Technical analysis

Looking at the context of ARB from a technical standpoint, up until the end of the year, ARB had around $1.5000 as a range ceiling. We did breach it historically, but all in all, this was the technical range we identified. Once we break out of here with significance and find demand, we can use this as ARB's key floor.

With the overall context from a Fibonacci retracement from $1, a key psychological number, and the highs recently printed at around $2.400, this pullback into $1.5000 lies within the key ratio of 61.8% Fibonacci, something we love to identify within the markets.

Alongside this, we have that bullish trend line, which, pre-New year, provided many great setups for Arbitrum, so we know how well-respected this trendline is. This backs the importance of following assets closely so you can get used to their trading patterns and the market's behaviour.

We do know that ARB likes to deviate levels, which can be due to manipulation or the market seeking liquidity. So, we have a buy box to look at for a trigger point that slightly breaches the recent pump from our level of interest of $1.5000.

Play for traders

Spot play: thinking long term, there is a case to buy now.

However, if you want the best price approach, allow for a potential pullback into the buy box region, which we can anticipate.

Leveraged players: if you will use leverage, protect capital with a stop.

Aggressively, a $1.5000 limit order could be placed, or you could simply wait to see how price action trades around the buy box and in and around this price region if and when we get the pullback.

Play for investors

Remember, what's a few percentage points pullback when we're looking for X multipliers on our investment over the next 6-15 months?

We are still very early in this cycle; there's much more to come. We have yet to enter price discovery on the overall altcoin market and even on ETH. As these assets begin to accelerate, you want to be positioned.

Cryptonary's take

Here, we are backing one of the coins in Cryptonary's picks, a solid fundamental asset that held strong despite the recent negative fundamental catalyst.

We have kept an eye on this since we covered it last year

You must be strategic and planned in your approach. Not every setup and opportunity is a given or a sure play, but planning and having a clear, detailed approach to execution is the best practice as a trader. You must foresee and act when the opportunity comes how you want it.