The native token of the leading Layer-2 network Arbitrum, ARB, has caught the attention of whales in the past few weeks. This occurred despite the altcoin‘s consistent decline in value. At the time of writing, ARB was trading at $0.73, having fallen nearly 10% in the last 30 days. On-chain evaluation of ARB’s supply distribution shows an increasing trend in the number of whale addresses holding between 10,000 and 10,000,000 tokens since April 1.
What Is Happening with Arbitrum?
Amid the price drop last month, these whales continued to purchase the token. According to Santiment’s data, their numbers increased by 4% in the last 30 days. The rise in ARB’s whale accumulation is due to its consistent decline in value over the past few weeks. This has led to trading at historically lower prices, presenting a buying opportunity for those considering trading against the market.
Data from the token’s market value to realized value (MVRV) ratio confirms that ARB is currently undervalued. The token’s MVRV ratio is negative when assessed over various moving averages. Specifically, ARB’s MVRV ratios for the 90-day and 365-day moving averages are recorded at -18.63% and -42.42%, respectively.
This data measures the ratio between an asset’s current price and the average price at which all assets were purchased. When above zero, the asset’s current market value is higher than the price most investors paid for their assets; it is considered overvalued and increases selling pressure.
On the other hand, an MVRV ratio below zero indicates that the asset’s market value is below the average purchase price of all circulating tokens. When this happens, the asset is said to be undervalued. A negative MVRV ratio offers a good buying opportunity as the asset trades at a lower price, allowing investors to accumulate at this level to sell at a higher price later.
ARB Chart Analysis
ARB’s downward trend continues, with the altcoin dropping an additional 6% in the past seven days. Overall demand for the Layer-2 token continues to decline, making any near-term price increase challenging. As of the date of this writing, ARB’s Relative Strength Index (RSI) stands at 46.44, below the 50-neutral line. This indicates that selling pressure outweighs buying activity among market participants.
Weighted sentiment data tracks the overall mood of the market regarding an asset. When its value is below zero, it indicates that most social media discussions about the asset are fueled by negative emotions such as fear, uncertainty, and doubt. This often signals an ongoing price decline.
If sentiment remains negative, ARB’s value could return to its all-time low of $0.57 last seen on July 5. However, if market sentiment turns positive, the Layer-2 token’s price could rise to $0.99.
