Robinhood Hype Fizzles: Arbitrum Tanks After Partnership News
The initial buzz around Robinhood’s association with Arbitrum did not increase investor interest; rather, it caused a significant decline in the price of ARB. Arbitrum dropped more than 8% in the last day, closing at $0.3273 with a market value of $1.62 billion, according to statistics from CoinMarketCap.
Shortly after American trading site Robinhood announced its eagerly awaited alliance with Arbitrum at a Cannes event, ARB’s price fell. According to reports, the partnership will allow EU-based customers to trade U.S. stocks on-chain through the development of the Robinhood Chain, a blockchain infrastructure by the Layer-2 network project.
Robinhood x Arbitrum Hype Fizzles Fast
Investors had already priced in a lot of the news when Robinhood hinted at the June 29 release. A.J. Warner, CSO of Offchain Labs, the firm that developed Arbitrum, and one of its senior executives, would be on a panel at yesterday’s event, the company announced.
After the announcement, ARB jumped 46% to $0.38 in eight hours, but it has subsequently dropped about 16%. Investors expected the good news and established positions ahead of time, then closed them after the announcement to realize their profits. This scenario is reminiscent of a traditional sell-the-news event.
Arbitrum Warning Signs: Death Cross Looms as Momentum Crashes
The 4-hour/USDT chart displays several bearish technical indicators that suggest that ARB’s downward trend is likely to continue. A death cross, which is a formation when the 50-day SMA is about to cross below the 200-day SMA, is what the market is calling this. Many traders view such a pattern as a powerful negative indication that frequently precedes protracted periods of price downturn.
The negative picture is further supported by momentum indicators. A sell signal, which indicates diminishing bullish momentum, is usually read as the MACD line crossing below the signal line. Additionally, the Chaikin Money Flow index has experienced a steep decline from 0.45 to 0.08, indicating a potential change toward net capital outflows and a notable decrease in buying demand.
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