On June 5, 2025, the Arbitrum to United States Dollar (ARB/USD) trading pair formed a bullish flag pattern on the 1-hour chart.
A bullish flag pattern appears when the price rallies sharply, then consolidates inside a small downward-sloping channel, usually signaling a potential continuation of the uptrend.
If this pattern confirms with a breakout above the flag’s upper resistance line near $0.370, ARB/USD could gain 15 percent from the current price of $0.3567. This move would target the projected level of approximately $0.4119.
Currently, the price trades below the 50-period Exponential Moving Average (EMA), which stands at $0.3613. This moving average acts as dynamic resistance. To confirm the breakout, ARB/USD must close above both the EMA and the red flag resistance line, with increased volume.
The pattern’s pole, created by the sharp rise on June 3, provides the measured target for the breakout. Volume has decreased during the consolidation phase, which aligns with a typical flag structure. If volume spikes during a breakout, it would support bullish momentum.
For now, the setup remains valid as long as the price stays above the flag’s lower boundary. If the breakout confirms, bulls may attempt to push the price toward the $0.4119 resistance zone.
ARB/USD RSI Signals Weak Momentum Below Neutral Line
On June 5, 2025, the Relative Strength Index (RSI) for Arbitrum to United States Dollar (ARB/USD) on the 1-hour chart showed a value of 43.89, with the RSI-based moving average line positioned at 47.89.
The Relative Strength Index is a momentum oscillator that measures the speed and change of price movements, ranging from 0 to 100. Values above 70 indicate overbought conditions, while values below 30 suggest oversold territory. A reading around 50 signals neutral momentum.
Currently, RSI remains below the neutral 50 level, indicating that sellers have a slight advantage in the short term. This positioning reflects weakening buying pressure after a recent local high near the 70 mark on June 3.
The RSI line has also crossed below its moving average, which further confirms bearish momentum. That crossover often acts as an early sign of downside continuation unless reversed.
However, RSI has not dropped into the oversold zone, meaning there is still room for further downside before triggering a potential reversal signal. For buyers to regain control, RSI must rise and hold above the 50 level, with the RSI line crossing back above its moving average.
Until then, momentum remains tilted toward the bears, aligning with the consolidation seen on the price chart.
ARB/USD DMI Shows Weak Trend Strength Near Equilibrium
The Directional Movement Index (DMI) for Arbitrum to United States Dollar (ARB/USD) on the 1-hour chart showed the following readings:
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+DI (Positive Directional Indicator): 21.24
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–DI (Negative Directional Indicator): 15.33
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ADX (Average Directional Index): 21.95
The Directional Movement Index is a trend strength indicator. The +DI line (blue) measures bullish strength, the –DI line (red) measures bearish strength, and the ADX line (orange) measures the overall trend strength, regardless of direction.
Source: TradingView.com
Currently, the +DI remains slightly above the –DI, indicating that buyers have a slight edge. However, the ADX, which is under 25, shows that the trend strength is weak.
The separation between the +DI and –DI lines is narrow, suggesting no strong directional pressure. Meanwhile, the ADX has declined from its earlier peak, reflecting loss of momentum since the June 3 rally.
For a confirmed trend, ADX must rise above 25. Until then, price action may remain range-bound or exhibit choppy movement. A sharp cross of +DI above –DI with a rising ADX would signal trend resumption to the upside.
As of now, the DMI supports a weak bullish bias with limited momentum.
ARB/USD SMI Turns Bearish as Lines Drop Below Signal Range
Meanwhile, the Stochastic Momentum Index (SMI) for Arbitrum to United States Dollar (ARB/USD) on the 1-hour chart showed the following readings:
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SMI: –47.61
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Signal Line: –44.34
The Stochastic Momentum Index is a refined version of the traditional stochastic oscillator. It measures the position of a security’s closing price relative to its high-low range over a given period, providing insight into overbought and oversold conditions.
Currently, both the SMI and its signal line are below the –40 level, indicating short-term bearish momentum. The blue SMI line crossing below the orange signal line strengthens the bearish outlook.
This drop follows multiple failed attempts to sustain moves above the midpoint (zero line), suggesting buyers are losing control. The last bullish crossover occurred around June 3 but failed to push the SMI into strong positive territory.
For bullish momentum to return, the SMI must cross back above the signal line and move toward the +40 area. Until then, current levels show downward pressure with no reversal signal yet.
Arbitrum Maintains Top TVL and Leads Layer 2 Capital Inflows
Arbitrum has held the highest total value locked (TVL) among all Layer 2 blockchains for three consecutive months. This consistent dominance reflects strong investor confidence and steady user demand. The network’s ability to retain capital signals persistent usage, even during market uncertainty.
Daily transaction volumes remain stable, further confirming active engagement. Despite overall market volatility, Arbitrum’s on-chain metrics highlight its functional reliability and continued traction.
Growth Initiatives Drive Ecosystem Activity
Several ecosystem initiatives have boosted user participation. The return of the Arbitrum Odyssey and the launch of the Kaito Yappers $ARB campaign have led to a sharp increase in engagement. Analyst CryptoBusy linked these developments to the recent recovery in ARB price following the May 31 low.
Meanwhile, major decentralized finance (DeFi) and SocialFi protocols have migrated to the Arbitrum chain. This migration has strengthened the ecosystem’s appeal to developers and project teams. In addition, Arbitrum introduced the Kaito Leaderboard—a tool to track ecosystem activity. The new feature has contributed to improving market sentiment and developer enthusiasm.
Layer 2 Capital Flows Favor Arbitrum
Stablecoin inflow data as of June 2, 2025, confirms a strong rotation of capital toward Layer 2 networks. Arbitrum led the entire blockchain sector in 7-day net stablecoin inflows, recording $381.3 million. This figure outpaced Tron’s $102 million and Binance Smart Chain’s $99.66 million by a wide margin.
Emerging chains such as Sui and Aptos followed with $82.91 million and $52.08 million, respectively, showing growing interest in newer infrastructure.
In contrast, Ethereum saw a $374 million net outflow over the same period. Capital appears to be shifting away from Ethereum’s base layer toward more cost-efficient Layer 2 networks like Arbitrum, which offer lower fees and faster transaction speeds.
Other major outflows included Solana at $239 million and Hyperliquid at $182.65 million. Base, Near, and Mantle also recorded negative net flows.
Optimism, Arbitrum’s closest competitor, attracted only $17.97 million in inflows—far below Arbitrum’s total. Although both serve similar scaling functions, the data shows users increasingly prefer Arbitrum over Optimism for Layer 2 deployments.
