This week, Ethereum’s popular second layer Arbitrum (ARB) is at risk of an unexpected sell-off. The protocol is set to unlock over $100 million worth of tokens today.
Specifically, 92.65 million ARB will be unlocked for the protocol’s contracts, project team and initial investors. The first team, those in the “Team, Future Team and Advisors” category, will receive 56.13 million tokens with a value of $63.98 million. On the other hand, those in the “Investors” category will unlock 36.52 million ARB worth $41.63 million.
Overall, this poses a potential risk of selling and supply pressure, as the amount of ARB added to the circulating supply is quite significant. The unlock will account for 3.5% of Arbitrum’s $3.03 billion market capitalization and impact the 2.65 billion ARBs already in circulation.
As Koinfinans.com reported, Arbitrum had unlocked 11.1 billion ARB worth over $2 billion on March 16. This activity corresponded to inflation of over 75% by that time and there was a risk of directly affecting the price of the asset. However, this effect has not been seen yet.
Arbitrum was trading at $2.11 two days before the March unlock and has fallen to $1.44, a 31% loss since the March 19 low. ARB is currently trading at $1.14 per token, which is down 46% in 33 days. The daily Relative Strength Index (RSI) reveals weak momentum for Arbitrum, which has not been able to recover since the previous unlock.
