Arbitrum is a Layer 2 scaling solution for the Ethereum blockchain, allowing businesses and individuals to improve their transaction speeds and enhance privacy. On Tuesday, Apr 25, the company held an airdrop of 113 million tokens - worth nearly $120 million - to reward 131 Decentralized Autonomous Organizations (DAOs) that have built projects on the Arbitrum network. As many expected, some of the DAOs sold the tokens, but the majority have held onto them, alluding to the long-term nature of the hold.

Consequently, the ARB price has slid 28% over the past week. Nonetheless, investors have been quick to spot bullish signals suggesting that the ARB price could start a rebound.

On-chain data from Loookonchain reveals that most of the top recipients of the Airdrop are in fact institutional whale DAOs - big entities more likely to be long-term holders and generate passive income than look for short-term opportunities. The surge in Daily Active Addresses (DAA) interacting on the network - which have grown from 17,687 on April 21 to 61,886 at the close of April 24, an increase of 250%, - is further suggested to be pushing the ARB price.

Currently, the ARB price is precariously above the $1.30 support level. If the top DAOs continue to HODL, the price could rebound to $1.50, and then $1.60, before facing bearish taking control. However, should it fall below $1.30, then it has the potential to drop to $1.23, where holders may be inclined to offer support. Either way, speculative investors must consider their options as the industry adjusts to new developments.



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