In recent weeks, large cryptocurrency investors, known as “whales,” have increased their holdings of Arbitrum’s native token, ARB, despite its declining value. ARB’s price has dropped nearly 10% over the past month, currently trading at $0.73. However, on-chain data reveals a growing number of whale addresses holding between 10,000 and 10,000,000 tokens since April 1.
Why Are Whales Buying ARB?
Despite ARB’s price drop, whales have consistently purchased the token. Santiment’s data indicates a 4% rise in whale accumulation in the past 30 days, driven by ARB’s lower trading prices, which provide an opportunity for market-savvy investors to buy at a discount.
Further analysis of ARB’s market value to realized value (MVRV) ratio confirms the token is undervalued. The MVRV ratio remains negative across various moving averages, with the 90-day and 365-day metrics showing -18.63% and -42.42%, respectively. This suggests that the current market value is below the average purchase price, making it a potential buying opportunity for investors.
What Do The Charts Indicate?
ARB’s price has continued its downward trajectory, dropping an additional 6% in the past week. The Relative Strength Index (RSI) stands at 46.44, indicating more selling than buying pressure. Weighted sentiment data also shows negative market sentiment, likely contributing to the recent price declines.
If this negative sentiment persists, ARB’s price could dip to its all-time low of $0.57. However, a shift in market mood could see the token’s value rise to $0.99.
Key Insights for Investors
– ARB is currently undervalued, with significant whale accumulation.
– The token’s MVRV ratio is negative, suggesting a buying opportunity.
– ARB’s RSI indicates higher selling pressure, affecting short-term price movements.
– Market sentiment is currently negative but could shift, impacting future prices.
In conclusion, while ARB’s price has faced significant declines, the increased whale holdings and undervalued status suggest that astute investors might find this a good entry point. The future price action will depend on shifts in market sentiment and overall demand for the token. Investors should keep an eye on these key metrics to make informed decisions.