Arbitrum (ARB) Could See an Upswing of 46% If It Breaks Out of This Technical Analysis Pattern

In a new post on X, analyst Ali Martinez has talked about a Descending Triangle pattern forming in the 4-hour price of Arbitrum.

An analyst has highlighted the possibility of Arbitrum (CRYPTO: ARB) experiencing a significant upswing if its price breaks out of a technical analysis pattern.

In a recent post on X, analyst Ali Martinez discussed the formation of a Descending Triangle pattern in the 4-hour price chart of Arbitrum.

As the name suggests, a Descending Triangle is a technical analysis (TA) formation that resembles a triangle sloped downwards. It consists of two trendlines—an upper level connecting lower highs in the price and a lower level parallel to the time-axis joining bottoms.

In TA, the upper trendline often indicates a point of resistance, while the lower trendline may act as support.

Generally, breaks out of either trendline indicate a continuation of trend in that direction. An escape above the triangle is considered a bullish signal, while a drop below it may foreshadow a bearish outcome.

In contrast to the Descending Triangle, there is also another pattern called the Ascending Triangle, which forms when the consolidation occurs towards an overall upside.

Here's the chart shared by the analyst, displaying the Descending Triangle in Arbitrum's 4-hour price over the last couple of months:

Arbitrum 4-hour price chart. Source: TradingView

As evident in the chart above, Arbitrum's 4-hour price recently experienced a retest of the upper level of the Descending Triangle, encountering resistance and leading to a price drop.

However, the coin also briefly retested the lower line yesterday, and this level seems to be holding for the cryptocurrency, facilitating a price rebound.

While these levels may not persist for long, considering ARB's rapid approach to the apex of the triangle, the narrowing range increases the likelihood of a breakout—either way.

Given Arbitrum's current price point, smack dab in the middle of the two levels, it's hard to predict which direction it will take.

According to Martinez, if the breakout occurs towards the upside, the cryptocurrency could end up enjoying a surge of around 46%. This figure is arrived at considering the height of the triangle, which involves a price swing of this percentage.

Now, all that remains is to be seen whether ARB will be able to find a break above the Descending Triangle or not.