The price of Arbitrum (ARB) has remained relatively stable in the $1.18 – $1.20 range over the past week. However, concerns have arisen after the popular DeFi lending platform, Curve Finance, suffered a $50 million hack due to a reentrancy attack on some liquidity pools. In light of this incident, the Curve Finance team has issued a warning about a potential exploit on Arbitrum’s tricrypto liquidity pool. While no profitable exploit has been identified yet, the team has advised users to withdraw funds as a precautionary measure to avoid possible losses. This article examines how ARB investors have reacted to the warning and the potential price impact.
Steadfastness of Long-Term Investors
Despite the warning from Curve Finance, on-chain data analysis reveals that long-term ARB investors are displaying a strong resolve and are not showing signs of panic. The ARB Mean Coin Age, which tracks changes in the trading patterns of long-term investors, has continued to trend upward since Monday, July 31. This steady rise, with an increase of 28% from July 16 to July 31, indicates that long-term investors are consolidating their positions and maintaining confidence in the asset despite the recent exploit scare.
Whale Investors Hold Neutral Disposition
Similarly, whale investors holding substantial amounts of ARB coins (ranging from 100,000 to 10 million ARB) have also remained neutral in response to the warning from Curve Finance. On-chain data indicates that these whales added 96 million coins to their wallet balances in the second half of July, and as of July 31, they have not shown any signs of initiating a sell-off. Their current holdings, valued at $113 million, could potentially trigger a price correction if they decide to panic sell. Other strategic investors will closely monitor the whales’ trading activity as more information about the Curve Finance hack surfaces in the media.
ARB Price Prediction: Consolidation Around $1.20
Considering the current stance of long-term and whale investors, ARB is expected to continue consolidating around the $1.20 territory if the potential exploit on Arbitrum’s tricrypto liquidity pool is quickly contained. The MVRV ratio, which confirms that most holders who bought ARB in the last 30 days are currently holding profits of about 14%, suggests that many may continue holding until it reaches 20%, around $1.25. If bullish sentiment prevails over the Curve Finance FUD, ARB could rally further towards $1.30 before any bearish response.
Potential Bearish Scenario
However, if the exploit concerns trigger panic selling among Arbitrum holders, the bears could gain control, leading to a downswing below $1. In this situation, investors may attempt to hold support at around $1.05 to prevent slipping into a net-loss position. Yet, if this support level fails to hold, ARB’s price could drop further towards $0.90.
As the warning of a potential exploit on Arbitrum’s tricrypto liquidity pool remains a significant concern, the reactions of long-term and whale investors will play a crucial role in determining ARB’s price movement. For now, both groups have shown resilience and maintained a neutral stance. If the exploit is contained swiftly, ARB is likely to continue consolidating around $1.20. However, if panic selling ensues, the price could face downward pressure. As events unfold, the market will closely watch the response of investors and the impact of the Curve Finance FUD on ARB’s price trajectory.