ARB Price Prediction: Arbitrum to Sell 750M Tokens; Price Dump?

Arbitrum community members were exposed to widespread FUD about the recently launched ARB token, as rumors about its sale surfaced. Holders of Arbitrum speculated that Arbitrum Foundation had sold a significant amount of ARB tokens for stablecoins. According to the official blog post by Arbitrum Foundation, the company started selling ARB tokens for stablecoins. The selling took place before the governance community of token holders had sanctioned a billion dollar budget for the organization.

Enraged Arbitrum Community

Arbitrum is facing backfire from the ARB community as they made numerous centralized decisions even before the launch of their DAO. With respect to the Arbitrum Improvement Proposal (AIP-1) on Arbitrum’s DAO, a provision amounting 750 million tokens is made to be utilized to pay for special grants, reimburse appropriate service providers and to cover ongoing administrative and operational expenditures of the foundation. The proposal was vetoed by almost 83% of the stakeholders.

The Arbitrum Foundation later addressed the concern raised by the community regarding the distribution of ARB tokens. The AIP-1 requested users to endorse the decision the Foundation took, prior to DAO’s launch. The forum post clarified that AIP-1 was a ratification rather than a governance proposal. The move was, however, negatively accepted by the Arbitrum community and became a victim of harsh criticism. In light of the occurrence, ARB price suffered a loss in double digits over the weekend.

ARB Price Action Analysis

ARB price witnessed a fall over the weekend by about 18.49%, under the influence of the occurrence. The present price is up by 135.5% since its airdrop. The volume shows red as several panicked investors resort to sell. The falling trendline continues to form as ARB price marks lower highs. The current price is testing the demand zone for Arbitrum, and shows weak signs of price reversal.

The downtrend in ARB price, led to selling pressure and a highly volatile market. The downticked OBV suggests the market to be unfavorable for Arbitrum. The MACD forms a negative cross and records strong selling action since the beginning of April. The RSI falls to the region below the average mark, and suggests a seller-dominant market. A 40-ranged RSI indicates a bearish market for Arbitrum.

Conclusion

ARB price witnessed a fall by double digit percentage after the official blog post from Arbitum Foundation created controversy regarding AIP-1. The foundation is facing a backlash after taking numerous centralized decisions before the launch of DAO. The proposed ratification was opposed by more than 80% of the community members. This set ARB price in bearish momentum. The price currently tests the demand zone near $1.15.

Technical levels

Support levels: $1.15 and $1.05

Resistance levels: $1.42 and $1.52

Disclaimer

The views and opinions stated by the author, or any people named in this article, are for informational purposes only and do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.