Institutions selling Arbitrum (ARB) tokens amid prolonged downtrends

2023-8-22 18:37

Arbitrum, a leading Ethereum-based layer2 chain, had its native token ARB exhibiting bearish actions since April 2023. Meanwhile, institutions seem ready to trim their holdings as they transfer ARB to centralized exchanges (CEXs).

🚨 Institutions appear to be selling $ARB as $ARB price has been down by ~20% over the past month.

1. Mandala Capital deposited 3.6M $ARB to #OKX at $1.017 on avg ($3.67M) over the past 3 hrs.

2. CAP Finance sold 1M $ARB for 1.02M $USDC at $1.02 on avg 18 hrs ago.

Details 👇 pic.twitter.com/4Dtrd3s0g6

— Spot On Chain (@spotonchain) August 21, 2023

SpotOnChain tweeted about CAP Finance and Mandala Capital preparing to shed ARB tokens. Mandala Capital transferred 3.6 million ARB coins to CEX OKX, whereas CAP Finance sold 1 million assets within the past day.

ARB has declined since dropping from its 18 April high of $1.81. The alternative token hovered at the $1 value area during this writing. Moreover, the layer2 alt’s consistent price dip had it losing 20% over the past month and 10% in the last seven days.

Increasing layer2 competition

Arbitrum’s downside performance comes as the layer2 sector sees magnified competition. Coinbase Layer2 BASE has seen impressive performance since its launch in August’s second week, with BASE’s revenue outshining Arbitrum.

Coinbase’s Layer-2 network Base is already competing with the top Layer-2 networks as its daily transaction volume recently surpassed Optimism and Arbitrum.

— wawexp (@pasbetting) August 21, 2023

Furthermore, BASE outperform rivals Arbitrum and Optimism in various metrics, including developer engagement, total value locked, and cumulative daily transactions. Faded institutional interest and intensified layer2 competition have ARB struggling.

Arbitrum’s potential future

Despite the struggles, Arbitrum promises to dominate the layer2 sector, aiming to flourish the Ethereum blockchain. Its TVL of over $2 billion presents Arbitrum as a top scaling solution.

Arbitrum surpassed the likes of Optimism and Polygon in adoption, considering the TVL. That’s promising since Arbitrum is a new entrant in the cryptocurrency space, still working on top-notch governance models.

Nonetheless, enthusiasts should beware of ARB’s lack of utility in the Arbitrum platform. Holders should remain cautious until the altcoin gains grounds as far as usage is concerned.

The post Institutions selling Arbitrum (ARB) tokens amid prolonged downtrends appeared first on Invezz.

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