- Arbitrum whales have accumulated 10 million ARB in the last two days
- Network activity also increased after dApp volumes increased by 121% in 24 hours.
Arbitration (ARB)at press time, was trading at $0.729 after gaining more than 5% in 24 hours. Trading volumes also increased by 89% to $414 million, with the same highlighting the growing interest in the altcoin.
Despite these gains, however, ARB remains under downward pressure on the charts. In fact, according to In the block80% of ARB holders appear to be out of the money (in losses) after a 55% year-over-year price decline.
And yet, several bullish signs have emerged recently, signs that could contribute to a trend reversal and support a lasting uptrend.
Whales accumulate 10 million ARB tokens
Arbitrage whales have increased their activity recently, after large trading volumes soared 38% in 24 hours to 85.9 million ARB. Much of this surge comes from the accumulation of whales, as shown by increased influxes of large holders.
Over the past two days, large addresses have accumulated 10 million ARB tokens – a sign of positive momentum. This accumulation also coincided with recent gains, indicating that whale buying was driving the uptrend.
(Source: In the block)
Whales represent 47% of Arbitrum’s total supply. Therefore, if this cohort buys, it is bound to have a significant effect on the price.
Rising dApp volumes could fuel the rally
According to DappRadarvolumes of decentralized applications (dApps) created on the Arbitrum layer two network increased by 121% in just 24 hours to reach $1.27 billion. The number of transactions also increased by 16% to 143,000.
DeFiLlama further revealed that Arbitrum toppled its main rival, Base, in terms of decentralized exchange (DEX) volumes. At press time, Arbitrum’s DEX volumes stood at $1.26 billion, slightly more than the Base network’s $1.25 billion.
A resumption of network activity is beneficial for prices as it could fuel demand. If these volumes continue to climb, this could also support a sustained long-term uptrend for ARB.
Can Arbitrum Reverse Downtrends?
Arbitrum traded in a descending triangle pattern on its daily chart, with the same showing that downtrends were widespread. A crucial support level stood at $0.68, with a decline below to accelerate the downtrend.
The Chaikin Money Flow (CMF) also had a negative value of -0.15, indicating an increase in cash outflows from ARB via sales activity. This indicator seems to further strengthen the bearish trend on the altcoin charts.
(Source: Tradingview)
However, a look at the decline in the Average Directional Index (ADX) revealed that the prevailing downtrend has weakened. This could lead to a price recovery. If buyers step in as whales continue to accumulate and the network shows strength, it could lead to a strong bullish rally for Arbitrum.
On the derivatives front, traders are positioning themselves for further gains. According to Coinalyze, ARB funding rates increased slightly and remained in the positive zone at press time. This suggests that long traders are willing to pay higher fees to maintain their positions.
(Source: Coinalyse)
However, an increase in long positions might not bode well for prices if ARB breaks the support at $0.68. The resulting downward trend could accelerate sales activity, pushing the price down further.
