Ethereum‘s Layer 2 solution, Arbitrum, has recently undergone a token unlock event, leading to a 25% decrease in the price of its native ARB token, now trading at $1.51. This significant incident has sparked various discussions related to the crypto market’s performance and the sentiment of its investors.
Token Distribution Sparks Market Movement
In a move termed the “Cliff Unlock,” Arbitrum released a massive 1.1 billion ARB tokens in one fell swoop. This distribution included over 673.5 million tokens to team members and advisors, with the remaining 438.25 million tokens going to the project’s investors. Such large-scale distributions often lead to worries about increased selling pressure in the market.
Contrary to what might be expected after a price drop, Arbitrum’s market capitalization has experienced an over 80% increase within a day, surpassing the $4 billion mark. This suggests that, despite the reduced token price, the broader crypto community continues to show faith in Arbitrum, underlining a robust demand for the altcoin.
Arbitrum Attracts Whale Activity
Market whales have been actively trading ARB, adding to its price volatility. Reports indicate that close to 58 million ARB tokens have been moved to different exchanges by 11 whales. Despite this, a good number of whales appear to be holding onto their ARB, reflecting a long-term bullish outlook for the cryptocurrency.
Further analytics have revealed that wallet addresses holding substantial quantities of ARB have seen an uptick, as noted by the crypto analytics firm Santiment. This trend points to an accumulation phase among whales, despite any immediate market trepidations surrounding Arbitrum’s token.