Arbitrum Faces a Massive $2.32 Billion Token Unlock, Should You Avoid $ARB?

Arbitrum Faces a Massive $2.32 Billion Token Unlock, Should You Avoid $ARB?

Key Insights

  • A massive $2.32 billion worth of Arbitrum (ARB) tokens are unlocking on 16 March, raising concerns about potential price drops.

  • This unlock is a “Cliff Unlock” meaning all tokens are released at once, similar to flooding the market.

  • The unlock includes 673.5 million tokens for the team and advisors and 438.25 million for investors.

  • Some fear a sell-off due to the large amount of tokens entering circulation, while others believe the impact might be priced in already.

  • Technically, Arbitrum appears somewhat stable and could potentially rebound after the unlock, but volatility is expected.

The crypto market is currently in a delicate situation. Bitcoin broke above the $69,000 resistance and even closed above this week.

Investors are now arguably in the most delicate situation since the last bull run, because of this:

<div class="paragraphs"><p>$30 billion in liquidations&nbsp;| Source: <ins><a href="" rel="noreferrer noopener">Twitter</a></ins></p></div>

$30 billion in liquidations | Source: Twitter

The tweet is scary enough, but this isn’t about Bitcoin—it’s about the altcoins—and Arbitrum.

According to data from Token Unlocks, a staggering $2.32 billion worth of ARB tokens are set to be released into the market this week, and we would all like to know:

Should Arbitrum be avoided?

Understanding the “Cliff Unlock”

Arbitrum has opted for a “Cliff Unlock” approach, meaning that on certain deadlines, all of the vested tokens would be released simultaneously rather than gradually.

This strategy is similar to opening floodgates and letting an enormous amount of tokens into the market in one fell swoop.

Data from Token Unlocks shows us that roughly 1.1 billion ARB tokens, or 76% of the circulating supply worth an insane $2.32 billion are set to be released into the market on 16 March.

<div class="paragraphs"><p>1.12 billion ARB to be unlocked</p></div>

1.12 billion ARB to be unlocked

The unlock will see two main groups including :

  • Team and Advisers received 673.5 million tokens, valued at around $1.41 billion.

  • Investors received 438.25 million tokens, worth approximately $915 million.

The effect of this amount of tokens being released into the market cannot be ignored, and we are bound to see some massive price volatility on Arbitrum very soon.

Market Speculations and Reactions

As expected, a massive wave of FUD has swept through the market, with some community members predicting a massive sell-off and others already even selling their holdings.

However, crypto influencers like JJcycles stated that the unlocks may be priced in already, and may not even be bearish at all.

<div class="paragraphs"><p>Why this may not be bearish news</p></div>

Why this may not be bearish news

The analyst compared Arbitrum to a previous token release by Solana, which saw an unexpected price surge instead of a dip after the tokens were unlocked.

Overall, the entire altcoin market might be at risk.

Arbitrum’s upcoming token release is only one of several happening this week, with others like Aptos, Arbitrum, Apecoin, Flow, CyberConnect, Moonbeam, and Euler set to unlock another collective $2.7 billion worth of tokens this week.

The bottom line of things is that investors should expect massive volatility in the prices of the altcoins, this week in particular.

As the community braces for impact, all eyes are on the clock, counting down to the end of the week that might turn out to be a boon or a bane for the market.

Should You Stay Away From Arbitrum? Technically Speaking

So far, Arbitrum looks pretty solid from a technical standpoint.

<div class="paragraphs"><p>Arbitrum in the charts</p></div>

Arbitrum in the charts

The chart below shows us that the cryptocurrency is currently in a consolidation, after breaking its previous all-time high of around $1.7 – $2.

Moreover, the RSI on the daily chart shows a bearish cross but is still in the neutral zone, indicating no particular bursts of strength from the bulls or bears.

In the worst-case scenario, we might see the cryptocurrency decline for a retest of the $1.7 zone (if the token unlock turns out to be bearish).

However, as long as we do not see a break below $1.7, Arbitrum looks pretty solid and primed for a rebound, with a potential target of around $3 at least.

Disclaimer: Voice of Crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.

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