Arbitrum Whales Are HODLing; Why Are ARB Prices Tanking?
March 18 2024 - 5:00PM
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While the recent unlocking of ARB triggered fears of a sell-off,
Lookonchain data suggests a different story. On March 18, the
analytics platform showed that a mere 58 million ARB,
representing only a tiny portion of the 1.1 billion tokens unlocked
on March 16, were sent to exchanges by just 11 large-scale
investors, commonly called “whales.” Are Whales Bullish On
ARB? This transfer indicates that despite some profit-taking,
other whales are HODLing on to their ARB, reflecting continued
confidence in the project’s future. On March 16,
Arbitrum sent 1.1 billion ARB to investors, team members, and
advisors in a “Cliff Unlock.” Analysts describe a “Cliff Unlock” as
a situation in which all allocated tokens for that event are
released simultaneously. Related Reading: Bitcoin Sentiment Cools
Off, Price Rebound Soon? Arbitrum chose to release all tokens at
once. 673.5 million were sent to advisors and the team. Meanwhile,
the remainder, 438.25 million, was sent to investors. The unlocking
event, as expected, was a source of concern that some receivers
would choose to sell in the secondary market. As expected,
ARB prices have decreased, reflecting the general sentiment across
the crypto market board. So far, ARB is down 24% from March 2024
highs. However, what’s clear is that the uptrend remains, and
buyers remain in charge despite the selling pressure. Based purely
on price action, ARB bulls have a chance if prices are above the
$1.6 to $1.65 support zone. Conversely, any upswing above this
level might drive prices to the upper end of the range at around
$2.20. Further upswings will continue the sharp expansion from
October 2023. At the time of writing, ARB is up 125% from Q4 2023
lows. Arbitrum To Benefit From Dencun, Cementing Its Layer-2
Dominance Lookonchain data shows that only a few tokens were sent
to exchanges less than a week after the unlocking event, suggesting
investors and whales are bullish about the project. L2Beat
data shows that Arbitrum, a layer-2 scaling solution for
Ethereum, is the largest in that category by total value locked
(TVL). By March 18, Arbitrum managed $14.7 billion worth of assets,
nearly 2X that of Optimism. While ARB is under pressure, the
broader Ethereum and crypto community remains bullish. Last week,
the “Dencun” update was released to the mainnet. Related
Reading: Bitcoin Approaches Risky Territory As Halving Event Draws
Near This update is significant as it further slashes transaction
fees, making layer-2s, including Arbitrum, more attractive for
users. This upgrade is especially appealing to developers and users
seeking to enjoy the high on-chain activity on Ethereum without
struggling with high gas fees and low scalability. As Layer-2
solutions find adoption, Arbitrum could benefit from this influx.
Feature image from Canva, chart from TradingView
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