Arbitrum [ARB] at Risk of Forming a Lifetime Low – Here’s Why

Over the last month, Arbitrum [ARB] has experienced a steep 31.67% decrease, and this downward trend seems to persist, with an additional 4.44% drop in the past day.

According to analysis conducted by CryptoCrypto, the prevailing market sentiment among both whales and other participants leans towards the bearish side, hinting at a possible escalation in selling activity.

Increase in Selling Pressure

Data from Artemis indicates a notable uptick in the number of active addresses on the Arbitrum network since the beginning of February.

From an approximate 224,000, the active addresses, which represent the transactions happening on the network, have surged to around 262,000 at present.

Typically, a rise in active addresses could signal either a bullish or bearish outlook depending on the broader market conditions. However, an analysis of the Average Time Held of Coins Transacted reveals a decline.

This metric calculates the average duration a coin is held before being exchanged. Current data suggests a significant drop of 79.96% in the average holding time to two weeks compared to the previous 30 days.

These figures imply a lack of motivation among market participants to retain ARB holdings.

To date, a total of 12.41 million ARB tokens have been exchanged, a number that could rise as holders seek to reduce their exposure.

Role of Whales in Amplifying Selling Activity

Whales, denoting significant investors in the market, have been persistently offloading ARB holdings. The most recent data shows a transaction of $15.2 million worth of ARB, with predominant activity from large sellers.

The presence of these sizable sellers is evident through the Bull Bear Ratio, illustrating the dominance of 150 large bears in the market over the last week.

Chart analysis indicates that if ARB fails to reclaim support at $0.4685, it faces the risk of a substantial price decline. Without this recovery, ARB may dip below $0.3453, marking a 26% decrease and setting a new record low.

However, a successful recovery to the support level and a resurgence of bullish sentiment could propel ARB towards $0.67, as indicated on the chart.

Amid Bearish Conditions, Bullish Prospects Emerge

Despite the prevailing bearish tone, a positive narrative persists within the market. A notable development includes the launch of USDT0, a new stablecoin across multiple chains, by Tether specifically for Arbitrum.

Considering the growing demand for stablecoins, this launch is anticipated to have a favorable impact on Arbitrum’s adoption and the increased utilization of ARB tokens.