Edit: Typo in the title. Should be Dencun not Decun.
Hello traders, welcome to another market analysis with yours truly. Today we focus on Arbitrum.
Arbitrum is in the spotlight with two up coming major events coinciding that could shake up the price of ARB.
Arbitrum is set unlock 1.1 billion tokens, valued at around $2.25 billion, on March 16th 2024. Usually, token unlocks are bearish events because the released tokens are released into circulation increasing the supply and causing volatility that leads to a price decline. ARB is currently trading at $2.06 at the time of writing this.
On the other hand, the upcoming Ethereum Decun upgrade which is predicted to lower gas fees on layer 2's to near zero is scheduled to happen on March 13th. This event can be seen as a bullish event for Ethereum and all layer 2s and their tokens. Lower fees will equal more usage of the networks which is good for adoption.
How these events will affect the price is still up in the air but with current market sentiment and Bitcoin reaching new highs, the hope of an approaching Alt rally could keep the ARB price from getting too low. Same goes for Op and Polygon.
Now let's examine some current activity.
Two whales have sold millions of ARB tokens ahead of the upgrade and token unlock. The whales identified as 0x141 and 0xc99 deposited 2.77 million ARB tokens worth $5.94 million. Allegedly the whales realized about $3.29 million I'm profit.
This whale activity signals that not all are confident in a continued rally, especially with the current crabbing the market is enduring. it had been said that the Dencun upgrade had already been priced in and ARB has risen to above $2 since ETH broke through $3k. With that being said the, depending on how ETH and BTC start the week we can predict how the token unlock will affect the Arbitrum price.
If BTC and ETH continue to rally we can expect ARB to breakthrough the $2.15 resistance. And make it's way to $2.80 before it attempts to break through the $3 price.
Assuming BTC and ETH start to decline we can expect some profit taking from ARB that could take the ARB price as low as $1.60. ARB might only experience a little dip before the market starts to pump again. If that were to be the case we can expect to see ARB bottom at around $1.85.
These two events being so close to each other bring some uncertainty to the ARB price, but like I said, Bitcoin is doing well in the current market with it's ETF continuing to break volume records as it dawdles at it's 2022 ATH price. Bullish sentiment for Bitcoin is bullish for the whole market because Bitcoin as the market leader moves market.
With less than a week till the unlock and 3 days till the upgrade this upcoming week is important for ETH and the Ethereum ecosystem.
We wait at the edge of our seats to see which direction the market goes.
And that's it for your market update.
Later traders!
