• Price consolidates between 2.82e-6 and 2.95e-6, with bearish pressure increasing after 17:30 ET.
• Volume surged past 70k at 01:30 ET, coinciding with a sharp drop to 2.86e-6.
• RSI and MACD signal weakening momentum as price approaches a potential support zone near 2.82e-6.
• Bollinger Bands contract midday before widening during late-night sell-off.
• Fibonacci retracements suggest 2.82e-6 as key level; price may test 2.80e-6 if support breaks.

The Arbitrum/Bitcoin (ARBBTC) pair opened at 2.94e-6 on 2025-10-21 at 12:00 ET and closed at 2.86e-6 on 2025-10-22 at 12:00 ET. The 24-hour high was 2.95e-6, while the low was 2.82e-6. Total volume amounted to 1,552,992.0 with a notional turnover of approximately 4.26 BTC (calculated from price × volume across all 96 intervals). The pair displayed a bearish bias, with key resistance at 2.93e-6 and potential support near 2.82e-6.

On the 15-minute chart, the 20-period and 50-period moving averages were both bearish, with the 50-period line below the 20-period. This indicated a short-term bearish trend, supported by the price action breaking below the 2.93e-6 level. A significant bearish engulfing pattern formed around 17:30 ET, signaling potential bearish continuation. A doji appeared near 2.93e-6, suggesting indecision among traders at that level, though the following candles broke lower with increased volume. The price appears to be consolidating around 2.86e-6, with a potential for a test of the 2.82e-6 support level.

The 12-hour Bollinger Band contraction observed around midday expanded significantly during the overnight session, coinciding with the price drop to 2.86e-6. This widening suggests increased volatility and potential for a breakout or breakdown. The price currently sits near the lower band, indicating oversold conditions and a potential bounce. However, if the support at 2.82e-6 fails, further downward movement could occur. Fibonacci retracements from the recent high of 2.95e-6 to the low of 2.82e-6 show the 61.8% level at 2.86e-6, which has been a recent confluence point with the 50-period MA.

The RSI moved into oversold territory around 03:00 ET, reaching levels near 30, suggesting a potential short-term reversal. However, the failure to hold above 2.86e-6 and the increasing volume of selling activity suggests that this may not be a strong bullish signal. MACD remained negative throughout the session, confirming the bearish trend. Momentum appears to have weakened, but the increased volume during the late-night sell-off indicates active bearish participation.

Backtest Hypothesis

Given the price action and the defined support and resistance levels, a backtesting strategy could be constructed to evaluate how price behaves around these key levels. A viable approach would be to apply a Trading Strategy based on the following assumptions:

• Support Level: Defined as the lowest close in the last 50 trading days.
• Resistance Level: Defined as the highest close in the last 50 trading days.
• Signal Trigger: A trade is initiated when the price closes within ±1% of either the support or resistance level.
• Entry Rule: Long at resistance, short at support, based on price proximity.
• Exit Rule: Close position at the opposite level.
• Risk Management: Add a stop-loss at 0.5% below the entry price and a take-profit at 1.5% above the entry for long trades; reverse for short trades.
• Data Frequency: 15-minute candles, using close prices.

This setup could allow for testing the profitability of using support and resistance levels as trading triggers in a rule-based, data-driven framework.