- Arbitrum price shows signs of tight consolidation after a recent market crash.
- On-chain metrics also show bullish accumulation from whales.
- Whales accumulated nearly 586 million ARB tokens in the last two weeks, with each address adding nearly 4.76 million ARB on average.
Arbitrum price could see an explosive move to the upside as major buy signals emerge. Additionally, high net-worth investors are scooping up ARB tokens, a move that further strengthens the bullish outlook for the Layer 2 token.
Also read: Polygon whales buy the dip as Layer 2 competition heats up
Arbitrum whales accumulate millions of ARB tokens
Arbitrum price registered a 24% crash between August 15 and 17, which created a local bottom at $0.882. This dip was the perfect opportunity for whales who have been accumulating ARB. According to data analytics platform Santiment, whales holding 1 million to 10 million tokens scooped up 586 million ARB between August 14 and 31. This 77% uptick in their holdings indicates that the investors bought the dip, which is a bullish sign for the token’s price.
ARB Supply Distribution by balance of addresses
A closer look at this accumulation shows that the number of addresses of whales holding 1 million to 10 million went up from 262 to 385 in the same period. Roughly 123 new addresses joined the network. Another way to interpret this is that each whale address holding 1 million to 10 million tokens added on average nearly 4.76 million ARB tokens to its holdings.
ARB Supply Distribution by number of addresses
Another indicator that signals an ongoing accumulation is the Whale Transaction Count. This index tracks transfers worth more than $100,000. A spike in this metric after or during a rally typically suggests whales could be moving their holdings to realize profits. On the contrary, if this metric notes an uptick after a sudden crash, it often indicates that whales are buying the dip.
For Arbitrum, this index spiked on August 17, which suggests en masse selling. But after this anomaly, the whale transaction count has been on a steady uptrend as ARB price continues to slide lower. This divergence is bullish and hints at accumulation from these large-wallet investors, adding credence to ARB’s optimistic outlook.
ARB Whale Transaction Count
Short-term ARB holders capitulate
Santiment’s 30-day Market Value to Realized Value (MVRV) hovers around -16% for Arbitrum, which indicates that ARB holders who purchased the token over the past month are at a 16% loss.
Based on Santiment’s research, historical MVRV data can be used to identify local tops and bottoms. For Arbitrum, -16% has been a key capitulation level that has resulted in recovery rallies. Since ARB is currently hovering in this opportunity zone, the chances of a bounce are high.
The last two times ARB dropped to this level were May 8 and June 14. Each time, Arbitrum price saw a 25% and 35% upswing, respectively, in the following three weeks. If history repeats, ARB holders are likely going to experience a quick upswing soon.
ARB 30-day MVRV
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Source: FX STREET