With Arbitrum’s (ARB) token unlock and Ethereum’s (ETH) Dencun Upgrade approaching, two whales have let go of millions of ARB tokens. According to Spot On Chain, the whales deposited 2.77 million tokens into Binance.
At the time the participants took the action, the tokens were worth $5.94 million while making $3.29 million in profits.
Arbitrum’s token unlock is scheduled to take place on March 16 while Ethereum’s Dencum Upgrade would take place three days earlier.
For some, these events are bullish for the token. But Arbitrum plans to release 1.1 billion tokens into circulation. Unlocking previously restricted tokens means increased supply. Therefore, the event might impact ARB’s liquidity, volatility, and volume. In most cases, these unlocks lead to a price decline as demand might not be able to match supply.
On the other hand, the Dencun Upgrade looks bullish considering that it could lower costs for Layer 2 projects including Arbitrum. Also, the closeness of the events implies that demand for ARB might surge and the impact of the unlock might be minimal.
At press time, ARB changed hands at $2.10. This value represented a 3.04% decrease in the last 24 hours. The decline could also be linked to the whales’ sell-offs. However, the 4-hour ARB/USD chart showed that the decrease could have been an opportunity to buy the token at a discount.
From the chart below, bulls took advantage of sellers’ exhaustion and built support at $2.07. Despite pushing the price higher, another hurdle appeared above. As of this writing, there was an overhead resistance at $2.15.
If ARB breaks through $2.15, then the price could head toward $3. But if the attempt is unsuccessful, ARB’s price might collapse below $2.
A look at the Relative Strength Index (RSI) showed that the reading had slipped below the midpoint, indicating bearish dominance. However, the indicator seemed set to break above the barrier.
ARB/USD 4-Hour Chart
Should this be the case, ARB might be able to breach the $2.15 resistance. Indications from the Bollinger Bands (BB) also showed high volatility, meaning price fluctuations could be wide.
In a highly bullish scenario, ARB’s price could head to a new all-time high. However, that would require a lot of buying pressure and less liquidations. On the bearish side, the value of the token might drop to $1.85.
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