Arbitrum (ARB), the Ethereum Layer 2 token, recently exhibited a buy signal based on its on-chain metrics, specifically the Market Value to Realized Value (MVRV) ratio. Despite this, the token's short-term outlook remains uncertain due to negative weighted sentiment and market trends suggesting a potential decline. Historically, ARB's MVRV ratio, both on 30-day and 365-day averages, showed negative values, indicating that the token was trading below its average purchase price, which typically suggests a favorable buying opportunity. However, a persistent exit of liquidity and a relative strength index (RSI) below the neutral threshold highlight the risks involved. This bearish sentiment, if continued, could push ARB's price below its long-term support level.
Disclaimer: Please note that the information provided in this article is based on the referenced research articles. It is essential to conduct further research and analysis before making any investment decisions. The cryptocurrency market is highly volatile, and investors should exercise caution and consult with financial professionals before engaging in cryptocurrency trading or investment activities.
