ARB eyes reversal after a double bottom: will support hold for another rally？

ARB is showing signs of a potential double bottom formation, but recent price action has lost key support levels. A retest of critical zones may determine whether the structure remains valid or gets delayed further.

Summary

• ARB has formed a potential double bottom but has not yet confirmed it with a breakout above $0.51.
• Price lost the value area high and is now approaching key support at the Point of Control and 0.618 Fibonacci level.
• A bounce from this zone could lead to another rally, but failure to hold risks a rotation back toward the $0.26 range low.

After rallying from range lows, Arbitrum (ARB) price action found resistance at a high tariff level around $0.51, a zone that has acted as a major cap in previous attempts. While the initial move looked promising for a potential trend reversal, price failed to sustain above the value area high and has since broken back below it on a daily closing basis. This development puts the current market structure at a critical inflection point.

Key technical points:

• Double Bottom Potential:Structure remains intact but is not activated until $0.51 breaks with volume
• Support Zone at POC and 0.618 Fib: Key technical confluence for a higher low to form
• Trading Range Still Valid: Broader structure reflects ongoing consolidation between $0.26 and $0.51

ARBUSDT (1D) Chart, Source: TradingView

The recent rally confirmed the potential for a double bottom pattern, but without a breakout above the $0.51 resistance, the formation remains unconfirmed. Price rejected from this level and has since lost the value area high, a key support level that typically underpins bullish continuation. With this level now breached, attention shifts to the point of control (POC), which sits below the current price and offers the next major technical area for potential support.

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The POC region aligns with the 0.618 Fibonacci retracement level, adding strong confluence and increasing the probability that this zone could act as a springboard for a bullish reversal. While price hasnt officially retested this zone yet, such a retest would be seen as constructive, offering a potential higher low setup that fits within the broader double bottom narrative. As long as this level holds, the structural integrity of the reversal setup remains intact, even if price action temporarily weakens.

However, if price fails to hold the point of control on a closing basis, then ARB risks rotating further down toward the $0.26 region, the original low where the double bottom began forming. This would extend the current trading range and delay any breakout attempt.

Its important to emphasize that while the double bottom is present in structure, it has not been activated; only a confirmed breakout above $0.51 with strong volume will validate the pattern and open the path for sustained upside. Until then, price remains in a reactive zone with high technical significance.

What to expect in the coming price action:

ARBs next decisive move will likely occur at the confluence of the point of control and 0.618 Fibonacci level. A strong bounce here could preserve the double bottom structure and lead to a renewed push toward $0.51. However, if this support fails, the range may expand downward, prolonging consolidation and delaying the breakout.