Arbitrum (ARB), a prominent second-layer solution for Ethereum (ETH), is poised to unlock over $100 million worth of tokens, raising alarms among investors and analysts. The protocol’s impending token release, scheduled for April 16, will see 92.65 million ARB entering the market, with the team and early investors set to receive a significant portion.
The unlock will allocate 56.13 million tokens, valued at approximately $64 million, to the project’s team, future team, and advisors. Meanwhile, investors will gain access to 36.52 million ARB, valued at $41.63 million. This influx of tokens into the circulating supply poses a considerable risk of sell-off and supply pressure, accounting for 3.5% of Arbitrum’s $3.03 billion market capitalization.
Previous instances of token unlocks have had profound economic effects on Arbitrum’s price. In March, the protocol unlocked 11.1 billion ARB, leading to a substantial inflation exceeding 75%, which directly impacted the asset’s value. Following the unlock, Arbitrum experienced a significant price decline, plummeting from $2.11 to $1.44 within a few days, and currently trades at $1.14 per token, marking a 46% decrease over 33 days.
Technical indicators, such as the Relative Strength Index (RSI), reflect a weak momentum for Arbitrum, further compounded by geopolitical tensions. Investors are advised to exercise caution and closely monitor market developments to inform their financial decisions. As the unlock date approaches, the crypto community remains vigilant, anticipating the potential market ramifications of this significant token release.
