- A rise in active addresses correlated with Arbitrum’s current selling pressure.
- Whales have contributed to the market drop, and ARB risks forming a lifetime low.
In the past month, Arbitrum [ARB] has declined by 31.67%, and the drop doesn’t appear to be slowing, as it has fallen another 4.44% in the past 24 hours.
Analysis by AMBCrypto showed that market sentiment among whales and other participants have been predominantly bearish, with selling activity possibly intensifying soon.
Surge in selling activity
Data from Artemis showed an overall increase in the number of active addresses on Arbitrum since the 1st of February.
Until the time of writing, active addresses, which measures interactions occurring on the chain, have surged from approximately 224,000 to 262,000.
Source: Artemis
Typically, a rise in active addresses could be bullish or bearish depending on other market conditions. However, an analysis of the Average Time Held of Coins Transacted shows a decline.
This metric calculates how long a coin is held before being transacted. Press time data showed that the average holding time was two weeks, a significant decline of 79.96% compared to the past 30 days.
This suggests that market participants have little incentive to hold ARB.
A total of 12.41 million ARB has been transacted so far, and this could increase as holders reduce their exposure.
Whales contribute to selling pressure
Whales, or large investors in the market, have continued to sell ARB. In the most recent move, a total of $15.2 million worth of ARB was transacted, with large sellers dominating.
Source: IntoTheBlock
The presence of large sellers was confirmed using the Bull Bear Ratio, which showed that 150 large bears dominated the market over the past seven days.
On the chart, ARB risks a significant price decline if it fails to reclaim support at $0.4685. If it does not, ARB could fall below $0.3453, a 26% decline, establishing a new all-time low.
However, if ARB reclaims this support level and bullish momentum builds, it could rise toward $0.67, as mapped on the chart.
Source: TradingView
Bullish narrative exists
Despite bearish conditions, there is a bullish narrative in the market. A key development is the launch of USDT0, a new cross-chain stablecoin from Tether, on Arbitrum.
Given the rising demand for stablecoins, this launch could have a net positive effect on Arbitrum, boosting adoption and increasing ARB’s usage.
Credit: Source link