Arbitrum (ARB) closed April positively despite negative concerns about the recent $120 million airdrop. On-chain data shows that the recent rally in ARB prices can be attributed to large HODLing investors in their bullish positions. Can ARB measure the $1.40 resistance?
Arbitrum (ARB) made headlines last week after it announced an Airdrop of 113 million tokens worth nearly $120 million to reward early builders.
However, a week later, the price rose by 4% to allay concerns about an imminent price bounce. Here’s how HODLing whales can help fuel another bull rally despite the constant media FUD.
Massive FUD still surrounds Arbitrum
Arbitrum ended April 2023 strong, however, the social perception surrounding Ethereum’s Layer 2 (L2) network scaling rally remains largely negative. On-chain data shows that the number of negative mentions for Arbitrum currently outnumber the positives.
The chart below shows how the ARB Weighted Sentiment has been trending negative since the price fell from a recent local high on April 14th. Between April 14th and the close of May 2nd, it decreased from 0.11 to -0.73.
Weighted sentiment is a paradoxical measure meaning that price usually moves in the opposite direction to market expectations. With social perception now approaching alarming levels, strategic investors may consider the time to take long positions in the ARB.
Whales remain undeterred
Confirming the bullish outlook, cryptocurrency whales with 1m to 100m ARB appear unaffected despite persistent media saturation concerns and supply saturation by April 24 Airdrop.
Instead of selling, the larger group of Arbitrum whales has marginally increased its holdings since Airdrop. Between April 26 and May 2, whales added 1 million ARB tokens worth $1.3 million to their balances.
This moderate accumulation trend indicates that large institutional investors remain confident in the long-term viability of Arbitrum Network. This could inspire other retail investors and prospective whales to become optimistic themselves.
Ultimately, green signals from the aforementioned metrics could drive the ARB price higher in the coming days.
ARB Price Prediction: The $1.30 support could prove too strong for the bears
Over the past week, bullish ARB holders defended the $1.30 support. Santiment’s market value to realized value (MVRV) data indicates further upside to come.
Notably, most cryptocurrency investors who bought ARB over the past month are experiencing marginal unrealized losses of around 2%. This indicates that they may not want to sell until they reach a profitable position.
Hence, investors are likely to continue to post 5% gains before they start selling collectively around $1.42. And if ARB can breach the $1.42 resistance, it could enter a prolonged rally towards the $1.50 region before the bears have a chance to regroup.
Conversely, the bears could turn the positive narrative around if the ARB price drops below $1.30. However, investors are likely to offer upside support at this level as they look to keep the loss position below 5%.
Otherwise, ARB may decline further towards the next important psychological support level at $1.20.
In line with Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate and unbiased reporting, but market conditions are subject to change without notice. Always do your own research and consult with a professional before making any financial decisions.