Arbitrum (ARB) is facing increasing skepticism among investors as trading volumes decline. The recent surge in liquidity belies the waning interest and points to possible weakening of ARB’s market position.$ARB
“Market participants remain cautious and unconvinced,” according to COINOTAG, reinforcing the bear market sentiment around ARB.
Arbitrum has seen a significant increase in liquidity over the past 24 hours. According to Artemis’ report, on-chain net flow reached $15.78 million. This metric puts ARB in a stronger position than Ethereum (ETH) and other leading blockchains. On-chain net flow is a key indicator of blockchain viability, measuring the net movement of assets in and out. However, the decline in trading activity calls into question the sustainability of this liquidity increase. As market participants remain cautious, this could negatively impact ARB’s price action.
Despite the increase in liquidity, ARB’s market activity is noticeably decreasing. The sharp decline in active addresses indicates a decrease in interest from market participants. According to data from IntoTheBlock, there has been a 24.30% decrease in active addresses in the past week. This indicates a decrease in interest from the trading community. In addition, the average transaction size has also decreased significantly, dropping to around $4,970 in the past 24 hours. This metric indicates a significant decrease in network participation.
The average holding period of ARB has also changed, rising to 5.4 months, indicating an increasing tendency for short-term trading among investors. The increasing influence of short-term investors is leading to a decrease in long-term demand. This may put further pressure on the price of ARB.
Currently, ARB is positioned in a supply zone on the daily chart, indicating the potential for continued bearish action in the near future. A supply zone defines an area where selling pressure is high and can lead to asset values falling. Given the current supply phase, ARB is likely to fall to $0.85. There is a significant liquidity cluster at this level. However, barring a major market sentiment change, ARB could continue to face downward pressure.