ARB Faces Potential Decline Amid Increased Selling Pressure and Liquidity Withdrawal

• Arbitrum’s ARB token faces significant selling pressure as large investors and retail traders withdraw liquidity, leading to potential market declines.

• Recent data shows that ARB has experienced the highest negative chain netflow recorded in the past 24 hours, indicating a concerning trend in market confidence.

• “The liquidity removal points to waning interest among major holders and retailers,” said a source from COINOTAG, underscoring the urgency of the current market dynamics.

This article explores the recent declines in Arbitrum’s ARB token amid significant liquidity withdrawals, highlighting trends and potential market impacts.

ARB faces threat as liquidity is removed

In the past 24 hours, Arbitrum (ARB) has seen a staggering $13.8 million worth of tokens withdrawn. This massive chain netflow indicates a clear trend of liquidity being pulled from the market, potentially leading to further declines in ARB’s price.

A negative chain netflow reveals that more ARB tokens are being sold than being added to the market. When liquidity is drained at this level, it suggests that investor confidence is weak and could lead to further downward pressure on prices.

Source: Artemis

If liquidity withdrawal continues on this scale, ARB may face additional declines, compounded by an increase in selling activity among key market players.

Large and retail investors are selling

Analysis reveals that large holders, specifically those controlling between 0.1% and 1% of total ARB supply, are actively offloading their tokens. In the last 24 hours, this group has transacted an impressive 131 million ARB tokens, valued at approximately $58.79 million, further signaling a bearish sentiment.

Source: IntoTheBlock

Additionally, retail investors are showing diminishing confidence in ARB, manifested by a 40.46% decrease in active addresses engaging with the token within the past week. Currently, only 7,490 addresses are active, raising concerns about the token’s future performance.

The decline in both large transactions and retail engagement suggests a compounded negative outlook, increasing the potential for further price drops in the ARB market.

ARB targets November’s low

Technical analysis indicates that ARB is at risk of falling further if the daily candlestick closes below its established support level. Should this happen, the token may challenge its previous low of $0.459 from November 2024, with the possibility of hitting an all-time low of $0.42 if the selling pressure does not abate.

Source: TradingView

In summary, the recent trends observed in the ARB market indicate that without a swift change in investor sentiment and engagement levels, the risks of continued declines remain high.

Conclusion

As ARB struggles amid significant liquidity withdrawals and diminishing investor activity, the outlook for the token remains precarious. Both large and retail investors appear to be distancing themselves from ARB, suggesting an urgent need for strategic measures to restore confidence in the market. Immediate attention will be essential to reverse these negative trends and stabilize the price.