Arbitrum (ARB) Reverses Month-Long Decline as Whales and Retail Traders Drive Recovery

After a month-long decline of 19.37%, Arbitrum [ARB] has reversed course. Over the past week, it surged by 24.03% and has extended its upward momentum with a 4.85% gain in the last 24 hours.

Recent data suggests that ARB’s recovery is being driven by strong participation from whales and retail traders. While current market sentiment supports further growth, potential risks to this trend remain.

Key points:

* Chain netflow data reveals the largest capital outflow from Arbitrum.

* A single whale transaction helps stabilize ARB amid selling pressure.

* Retail traders drive bullish momentum with higher funding rates and spot traders transfer ARB to private wallets.

Massive chain outflow poses a risk to ARB gains

As Arbitrum (ARB) fiyatı soared over the past week, a crucial on-chain metric hinted at potential risks to this bullish trend. According toArtemis, chain netflow data revealed that over the last seven days, ARB recorded the largest negative chain netflow.

This massive capital outflow from Arbitrum stood at -$165.2 million, highlighting the highest chain netflow outflow observed during this period. Notably, this outflow surpassed that of Ethereum, Avalanche, SUI, and Injective.

Chain netflow reflects the total movement of assets across a blockchain. It is calculated as the difference between total inflows (assets received) and outflows (assets sent) across all addresses.

A negative chain netflow, as seen with ARB, typically indicates reduced user activity and waning confidence in the asset, which can lead to price declines. However, other factors may also influence price movements.

Whales prevent further ARB decline

Despite Arbitrum (ARB) facing significant selling pressure, a single whale transaction played a crucial role in stabilizing the asset and preventing a sharp price drop.

According to data from IntoTheBlock, there was a surge in large transaction volume over the past 24 hours. Among these transactions, one stood out with a large buy order.

This transaction involved the movement of 281,420 ARB, valued at $257,660. This likely buy order also coincided with a 4% price increase during the same period.

IntoTheBlock defines a whale as an address controlling 1% or more of an asset’s total supply. Such significant purchases by whales often have a ripple effect on the broader market.

In this case, the large whale transaction might have sparked increased demand among retail traders, further supporting ARB’s recovery from the recent sell-off.

Retail demand surges higher

As Arbitrum (ARB) fiyatı recovers from recent lows, key market metrics among retail traders indicated growing confidence and activity in the asset’s bullish price movement.

One notable metric is the funding rate, which has risen steadily and now sits at 0.0082%. This metric reflects the payments made by traders to keep their positions open on a futures contract.

A positive funding rate, as seen with ARB, indicates bullish market sentiment, with long traders paying a premium to keep their contracts active, while short traders receive the payments.

Another important metric is open interest, which reflects the total notional value of unsettled derivative contracts. For ARB, open interest jumped by 8.81% over the last 24 hours to reach $256.01 million.

This increase in open interest suggests heightened speculative activity in the market that favors further gains for Arbitrum (ARB).

Additionally, spot traders are also showing preference for transferring ARB from exchanges to private wallets for long-term holding. Over the past 24 hours, there has been a net transfer of over $2.39 million in ARB moving out of exchanges.

This movement of assets from exchanges to private wallets can potentially contribute to a supply squeeze, especially if demand remains high in the market.