- Arbitrum’s token has plummeted to the lowest level on record.
- There are signs that Arbitrum whales have dumped the token.
- Activity in Arbitrum’s ecosystem has plunged recently.
Arbitrum price has plunged to a record low and there are concerns the once popular token has room for more downside. ARB token dropped by more than 5% in the past 24 hours and hit a record low of $0.7822. In all, Arbitrum has plunged by more than 70% from its all-time high.
Why Arbitrum price has plunged
There are three main reasons why Arbitrum price has crashed hard in the past few weeks. First, the obvious reason is that this decline is in line with what other cryptocurrencies like Cardano, Avalanche, and Solana. All these coins have dropped to their year-to-date lows as Bitcoin has moved to a bear market.
Second, Arbitrum whales have been dumping the token. Recent data shows that the biggest ARB holders have been selling their holdings. This is a common situation in most newly listed crypto tokens. It happens when original investors sell some of their tokens in a bid to recoup their investments.
Third, Arbitrum has been releasing billions of tokens to the market through their token unlock schedule. Data by TokenUnlocks shows that over 1 billion tokens have been unlocked.
Arbitrum has a maximum circulating supply of 10 billion ARB tokens, meaning that this dilution will continue for a while. The next big unlock will happen in March next year when the developers will release over 1.1 billion tokens.
Further, it seems like activity in Arbitrum’s ecosystem is in a deep dive. For example, the total value locked (TVL) in its DeFi ecosystem has dropped by almost 20% in the past 30 days. It stands at over $2.59 billion, down from its all-time high of over $4 billion.
Arbitrum’s number of daily users has dropped to ~120,0000. At its peak, Arbitrum had over 250k daily active users.
ARB price forecast
The 4H chart shows that the Arbitrum price has been in a steep downward trend in the past few months. It recently dropped below the important support at $0.8684, the lowest level on September 1 this year. The token’s Relative Strength Index (RSI) has moved to the oversold level.
My view is that the ongoing panic selling will see Arbitrum continue falling in the near term before bouncing back eventually. This decline could see it drop to the next key support level at $0.70.
