Thank you for the additional information.
Well this does seem like that you have subcutaneous or rather bleeding in the deep tissues of the arm, especially if the color changes to a purplish hue. Now as to what can be the cause, that would have to be determined by getting the tests i mentioned above done first of all. It is possible that you have an underlying bleeding disorder. This could be something like idiopathic thrombocytopenic purpura in which there is a drop in the platelet count however i would first consider nutritional deficiencies like vitamin B12, K, D deficiencies. This could also be the result of another autoimmune disorder like the ITP i mentioned above or even one of the other numerous conditions which are a part of autoimmune disorders.
The most important thing here is that the bruise is expanding and does not seem to be settling on its own, anytime a spontaneous bruise appears on your body, it HAS to be evaluated by your healthcare provider. A CBC and PT/APTT/INR test HAS to be done under all circumstances. This can then be followed by more specific tests like ESR, ANA depending on the results of the initial tests. Usually bleeding spontaneously isnt associated with diabetes per se but injuries can fail to heal properly with uncontrolled diabetes, if this was more brownish in color i would consider acanthosis nigricans which is associated with diabetes. But since it isnt, i would STRONGLY recommend that you have the above tests done as soon as possible. One more possibility can be senile purpura if your age is above 60-65, that occurs due to fragility of the skin and blood vessels due to exposure to the sun. This usually doesnt need specific treatment.
So in short i would recommend that you get the above tests done and contact your doctor for a definitive diagnosis. Do this as soon as you can.
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