While the recent ARB unlock sparked fears of a selloff, Lookonchain data suggests a different story. On March 18, the analysis platform watch that only 58 million ARBs, 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 referred to as “whales.”
Are whales bullish on ARB?
This transfer indicates that despite some profit taking, other whales are turning to their ARB, reflecting continued confidence in the future of the project.
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 tokens allocated for that event are released simultaneously.
Arbitrum chose to release all tokens at once. 673.5 million was sent to advisors and the team. Meanwhile, the rest, 438.25 million, was sent to investors. As expected, the unlock event was a cause for concern that some receivers would choose to sell on the secondary market.
As expected, ARB prices declined, reflecting the general sentiment in the crypto market. So far, ARB is down 24% from March 2024 highs. However, what is clear is that the uptrend persists and buyers remain in charge despite the selling pressure.
Based on price action alone, ARB bulls have a chance if prices are above the $1.6 to $1.65 support zone. Conversely, any rise above this level could push prices towards the upper end of the range, around $2.20. Further increases will continue the strong expansion starting in October 2023. At the time of writing, ARB is up 125% from Q4 2023 lows.
Arbitrum will benefit from Dencun, strengthening its Layer 2 dominance
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 watch that Arbitrum, a layer 2 scaling solution for Ethereum, is the largest in this category in terms of total value locked (TVL). As of March 18, Arbitrum managed $14.7 billion in assets, nearly twice that of Optimism.
While the ARB is under pressure, the broader Ethereum and crypto community remains optimistic. Last week, the “Dencun” update was released on the mainnet.
This update is important because it further reduces transaction fees, making layer 2s, including Arbitrum, more attractive to users. This upgrade is particularly attractive to developers and users looking to take advantage of the high on-chain activity on Ethereum without having to worry about high gas fees and low scalability. As Layer 2 solutions are adopted, Arbitrum could benefit from this influx.
Featured image from Canva, chart from TradingView
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