What are the prospects for Arbitrum after the airdrop?

RBC experts appreciated the effectiveness of the distribution of tokens for the project and told how the ARB token rate could behave in the future.

After the sensational airdrop of the Arbitrum project (March 23), 1 billion ARB tokens were released to the market, which were distributed between 625 thousand addresses. The total market capitalization of the token has stabilized at $1.44 billion.

At the time of publication, the price of ARB is at $1.14. After analyzing the experience of projects such as Optimism, Aptos and Blur, whose tokens also entered the market as part of large-scale airdrops, experts interviewed by RBC Crypto told how the ARB token rate could behave in the future.

“General bullish mood”

After listing on exchanges, tokens of projects with airdrops, as a rule, demonstrate high volatility – there can be both sharp price fluctuations and drawdowns of tens of percent at once, comments Roman Nekrasov, co-founder of the ENCRY Foundation. In general, ARB corresponds to the “most positive pattern”: the price of the token did not collapse after the start of trading on the Bybit, Kucoin, MXC, Huobi, Okex exchanges, and then on Binance, although it experienced serious fluctuations. On Huobi, the exchange rate even reached $11 per token on the day of listing, although the price went down almost immediately.

First of all, this volatility is due to the fact that those who received ARB tokens during the airdrop decided to take profits immediately after the listing, which had a pressing effect on the rate. On the other hand, according to Nekrasov’s observations, a significant number of sell orders were placed at a significant excess of the market price, which pushed the rate higher.

If we compare the release of ARB to exchanges with other large airdrop tokens, the similarity can be seen in the high volatility at the start of trading, Nekrasov notes. The main difference is the “general bullish sentiment” of investors regarding the ARB, which is favored by data such as the increase in the total value locked (TVL) of the Arbitrum network by a quarter over the past week. According to DefiLlama, the Arbitrum blockchain has a TVL of $2.18 billion. Its closest competitor, Optimism, has $907 million of capital locked in its ecosystem.

Arbitrum and other projects that organized the distribution of tokens do indeed have similar patterns when they enter the exchanges, Vladimir Cherpichnikov, head of the Exmo.me exchange, agrees. Price charts, according to his observation, are similar: a price jump, and then a corrective movement. In such cases, it is best to wait for the formation of price levels on long timeframes, and then try to trade. If a trader plans short-term trades, standard risk management measures should be followed, the expert advises.

The start of ARB trading was marked by the fact that on some exchanges trading started a little later than announced, and the fact that the influx of users led to failures in resources for obtaining tokens and on exchanges. The release of the token on the exchanges was immediately accompanied by high trading volumes, which even more attracted crypto traders. This makes it possible for large players to form positions without much damage to the average purchase price, Cherpichnikov notes.

In his opinion, it is difficult to predict the further development of the ARB price, since the price levels have not yet been fully formed. In the short term, it is worth paying special attention to the $1 level, as it will act as psychological support, the head of Exmo.me notes. In case of a positive scenario, you should be careful at the price of $1.5. If this resistance is broken, the price is likely to quickly approach $2.

“Great marketing ploy”

The effectiveness of airdrops directly depends on the marketing work that the project did before the distribution of tokens, explains Roman Nekrasov, talking about how effective the airdrop turned out to be for Arbitrum. First, the project needs to develop the community, attract new capital, constantly hinting at the possibility of a profitable airdrop for active participants. In such conditions, we can talk about success – even if some users in the community decide to sell ARB tokens, interest in the new asset will continue.

The effectiveness of this model has a good effect on the popularity of the project – this is an excellent marketing ploy, adds Cherpichnikov. In the case of Arbitrum, popular thematic media “literally exploded with news.” People love to get something for free, especially if it brings good profits in the future, the expert notes, while specifying that after the distribution of tokens, there is a high probability of participants selling assets.