On Saturday, March 16, the Arbitrum (ARB) layer 2 protocol unlocked 1.1 billion ARB tokens as part of its 2024 roadmap. This event caused a significant drop in the value of the native token, with losses of up to 18% reported over the past week.
In the last 24 hours, more whales have been sending ARB tokens to exchanges to sell, indicating a possible further drop in the protocol's prices. This token unlock marks the beginning of a four-year phased process, releasing a specific amount of tokens every four weeks until 2027.
11 whales dump $58 million in ARB tokens
Following the massive unlocking of ARB tokens, analytics firm Lookonchain revealed that 11 whales deposited 34 million ARB tokens (equivalent to $58 million) on exchanges.
Additionally, on-chain data provider “The Data Nerd” noted that trading company Wintermute has been continuously depositing ARB tokens for the last 48 hours, potentially for sale purposes.
The data provider notes that digital asset trading firm Wintermute now holds just 7.22 million ARB tokens worth $12.35 million, indicating that they have already deposited or sold ARB worth $18.12. millions of dollars in recent days.
The ARB token has been downtrend by 29% since it reached its all-time high (ATH) of $2.39 on June 12, 2024. After the unlock event, ARB traded as high as $1.96, but fell to $1.61 within 48 hours.
The token has managed to recover the $1.68 level despite being in the red zone for the last 24 hours. If the price falls further, ARB's potential support walls are identified at $1.56, $1.46 and potentially as low as $1.32.
Arbitrum post-unlock journey
NewsBTC reported that there has only been one previous unlock event for ARB tokens. On the first day after unlocking, ARB saw a 3% increase, indicating positive market sentiment and initial demand.
However, the price of the token gradually decreased, reaching a low of -21% approximately 21 days after the unlock event. Interestingly, around the 25th day, the price began to recover significantly, rising 19% above the breakout day level.
These patterns suggest that while Arbitrum may face initial downward pressure after the unlock, there is potential for a recovery and positive price movement in the coming weeks.
The future trajectory of ARB's price action remains uncertain despite experiencing a 15% drop since its first day of unlocking. Drawing from the past unlock eventIf historical patterns hold, there may be a further 6% decline, in line with the previous 21% drop seen 25 days after the first Arbitrum unlock event.
This hypothetical scenario would place Arbitrum at $1.57, indicating a favorable medium-term outlook. uptrend structure.
However, it is essential to note that past patterns do not guarantee identical results in current price trading. However, analyzing historical data can provide valuable information and help understand and evaluate potential price movements.
Featured image from Shutterstock, chart from TradingView.com
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