Arbitrum airdrop-related selling subsides, but Dapp use sustains while smart money accumulates ARB

The Arbitrum token airdrop led to a massive dump of ARB tokens and projects in the Arbitrum ecosystem in a “sell-the-news” type of event. However, the Ethereum Layer-2 activity remains strong, with the selling pressure of ARB tokens likely done with, making the rollup well-positioned for further growth.

Arbitrum ecosystem tokens sees sell-the-news type event

The Arbitrum (ARB) airdrop was announced on March 16, which caused a significant uptrend in native token prices of Arbitrum ecosystem projects like GMX), Magic , Gains Network (GNS) and Radiant Network (RDNT).

The primary reason behind the pump was the ARB airdrop catalyzing the Arbitrum

It is also encouraging to see that the liquidity across other applications like lending services AAVE and Radiant Network and derivatives trading platforms in GMX and Gains Trade have not declined after the airdrop.

ARB token flows after the airdrop

$ARB token witnessed mass selling on the day of the airdrop, with prices dropping from $10.29 to $1 within hours.

One week after the token’s launch, 87% of the eligible wallets claimed their airdrops. In comparison, the Optimism airdrop, conducted in May 2022, has been claimed by only 63.2% of the addresses. It suggests that the network is close to reaching maximum claims, meaning the selling pressure from airdrop participants could subside.

Some “super airdrop hunters” who farmed ARB tokens in bulk with more than one Ethereum address added considerably to the ARB selling pressure. On top of that, there’s no dilution in the token from investors or team unlocks for the next four years.

Nevertheless, there were several whale accumulation reports from on-chain analytics firms, LookOnChain and Arkham Intelligence.

Another whale withdrew 2.42M $ARB ($3M) from #Binance and #OKX 3 hours ago and received 2.32M $ARB ($2.88M) from another address.

Then added 1,725 $ETH ($3M) and 3.74M $ARB ($4.64M) on #Uniswap to provide liquidity.

Seems like whales are buying $ARB.https://t.co/1WtPm6n3lx pic.twitter.com/B5Tb32xUw3

— Lookonchain (@lookonchain) March 27, 2023

The smart money wallets identified by Nansen claimed a total of 15.2 million ARB tokens, representing 1.19% of the total unlocked supply. The smart money marker is used to identify ETH addresses of hedge funds, institutional investments and whales.

The total ARB balance of these wallets is greater than the amount claimed at 15.5 million ARB tokens, meaning smart wallet addresses added additional ARB tokens to their wallets.

While the Arbitrum airdrop was a “sell-the-news” event for Arbitrum’s native token and its ecosystem projects, the activity and liquidity on the Ethereum Layer-2 network remain strong. With the lion’s share of ARB selling from airdrop participants likely complete, the focus will shift back toward Arbitrum’s growth.