While the recent ARB unlock triggered fears of a sell-off, data from Lookonchain suggests a different story. On March 18, the analytics platform showed that just 58 million ARB, representing just a small 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 optimistic about ARB?
This transfer indicates that, despite some profit-taking, other whales are joining his ARB, reflecting continued confidence in the project’s future.
On March 16, Arbitration sent 1.1 billion ARB to investors, team members and advisors in a “Cliff Unlock”. Analysts describe a “cliff unlock” as a situation where all tokens allocated for that event are released simultaneously.
Arbitrum chose to release all tokens at once. 673.5 million were sent to advisors and staff. However, the remainder, 438.25 million, was sent to investors. The unlock event, as expected, was cause for concern that some receivers would choose to sell on the secondary market.
As expected, ARB prices declined, reflecting the general sentiment across the crypto market. So far, ARB is down 24% from its March 2024 highs. However, what is clear is that the uptrend remains and buyers remain in charge despite selling pressure.
Based purely on price action, ARB bulls have a chance if prices are above the $1.6 to $1.65 support zone. On the other hand, any recovery above this level could take prices towards the upper end of the range, around $2.20. Further hikes will continue the strong expansion from October 2023 onwards. At the time of writing, ARB is up 125% from the Q4 2023 lows.
Arbitrum will benefit from Dencun, consolidating its dominance in layer 2
Lookonchain data shows that only a few tokens were sent to exchanges less than a week after the unlock event, suggesting that investors and whales are optimistic about the project.
L2Beat Data show that Arbitrum, a layer 2 scaling solution for Ethereum, is the largest in this category by total value locked (TVL). As of March 18, Arbitrum managed $14.7 billion in assets, nearly double that of Optimism.
Although ARB is under pressure, the broader Ethereum and crypto community remains optimistic. Last week, the “Dencun” update was released on mainnet.
This update is significant because it further reduces transaction fees, making Tier 2, including Arbitrum, more attractive to users. This upgrade is especially attractive to developers and users looking to take advantage of the high on-chain activity on Ethereum without facing high gas fees and poor scalability. As Layer 2 solutions are adopted, Arbitrum will be able to benefit from this influx.
Featured image from Canva, chart from TradingView
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