August 22, 2025 – Arbitrum’s governance token $ARB is drawing attention in the crypto market after forming what analysts describe as a “perfect double bottom” pattern, a widely followed bullish technical indicator.
Crypto trader and analyst Alex Clay shared the observation on X, noting that despite ongoing corrections in traditional finance (TradFi) markets, the setup for $ARB appears favorable for a potential breakout rally.
“#ARB a perfect Double Bottom formation. We might go lower due to the TradFi market correction, but no doubts it’s the dip for $ARB and the reaction will be Mega Bullish once there is a recovery,” Clay commented.
The double bottom pattern is often considered a signal of trend reversal. It is formed when an asset tests a key support level twice, fails to break lower, and then rebounds higher. Traders typically view this as a sign that selling pressure is fading, opening the door for buyers to regain control.
The formation on $ARB’s chart shows two distinct lows with a neckline resistance forming at a higher level. If price sustains above this neckline, analysts expect a significant rally that could push the token to fresh local highs.
Despite the technical optimism, Clay also warned that broader financial market conditions remain a risk. Global equity and bond markets have been under pressure, which has in turn impacted cryptocurrencies. Bitcoin ETFs have seen five consecutive days of outflows totaling nearly $1.2 billion, while Ethereum ETFs only resumed inflows recently with $288 million recorded on August 21.
Arbitrum plays a central role in the Ethereum ecosystem as a Layer-2 scaling solution, enabling faster and cheaper transactions. It is one of the most widely used protocols, consistently ranking among the top networks for total value locked (TVL) and user activity. The $ARB token enables community governance and protocol decision-making, giving it importance beyond speculative trading.
Market sentiment among both retail traders and institutions appears to be shifting. While Bitcoin and Ethereum remain the primary focus for large-scale investors, altcoins connected to crucial infrastructure such as Arbitrum are gaining traction. Some traders point out that tokens like $ARB often deliver higher percentage gains during bullish reversals compared to larger, more established assets.
For the bullish case to materialize fully, traders are watching critical zones on the chart. Sustained trading above the neckline would confirm the double bottom breakout, while losing support at the prior lows could invalidate the setup. Near-term projections suggest possible upside moves in the range of 20–40% if momentum builds.
The outlook will depend not only on Arbitrum’s chart but also on the broader macro environment. If traditional markets stabilize and institutional crypto demand returns, analysts believe $ARB could become one of the leading altcoin performers in the current cycle.
As traders eye the next move, Clay’s message remains confident: after weeks of decline, this correction may be the dip that sets the stage for $ARB’s “mega bullish” comeback.