Arbitrum (ARB) investors are bracing for a challenging week ahead as the platform prepares for a potential sell-off of over $2 billion worth of its tokens. This unlock stems from Arbitrum's Genesis distribution and forms part of the standard proof-of-stake (PoS) issuance protocol.
On March 16, vesting contracts are set to release 1.11 billion ARB tokens, equivalent to $2.06 billion at current prices. This represents one of the largest single unlocks ever recorded for the platform and dominates the total cliff unlocks for the next seven days by over 86%.
Cliff unlocks next 7D: Arbitrum (ARB). Source:TokenUnlocksApp
The massive unlock amounts to 87% of Arbitrum's current circulating supply, nearly doubling ARB's capitalization to $2.38 billion, as per CoinMarketCap data.
Arbitrum (ARB) market data. Source:CoinMarketCap
Of the unlocked tokens, the 'Team,' 'Future Team,' and 'Advisors' are slated to receive 60.5%. After March 16, these entities will have the option to liquidate 673.5 million ARB, valued at $1.25 billion. Additionally, 'Investors' will gain access to 438.25 million ARB, valued at $810.76 million.
March 16, ARB unlock distribution. Source:TokenUnlocksApp
At present, ARB is trading at $1.89 per token, as per TradingView's crypto index. While Arbitrum has experienced increased demand due to the popularity of layer-2 solutions for the Ethereum Web3 ecosystem, it currently trades within a consolidation range on the daily chart.
ARB/USD daily chart. Source:TradingView
The impending massive token unlock and potential sell-off could significantly impact ARB's performance. Therefore, it's conceivable that ARB may test the $1.0 psychological resistance level in the coming week as developments unfold for Arbitrum.
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