Ethereum currently stalling at around $1,800, and upcoming airdrop could be reason behind it
Ethereum whale activity has increased as the market awaits the forthcoming Arbitrum airdrop, likely to increase market volatility drastically. The recent lackluster performance of Ethereum, the second most valuable cryptocurrency by market capitalization, can be ascribed in part to this anticipation as investors await the market impact of the airdrop.
One notable example of increasing whale activity is an Ethereum whale who transferred 7,868 ETH to Binance 10 hours before the Federal Reserve’s rate decision was announced. Binance paid this whale 19.6 million USDC merely two hours after the announcement.
The guy who calls himself “smartestmoney” transferred 7,868 $ETH to #Binance 10 hours before the announcement of the Fed rate decision.
Then received 19.6M $USDC from #Binance 2 hours after the announcement. #FOMC
Really smart!https://t.co/3wI6YKZlB8 pic.twitter.com/BqtIItEYMS
— Lookonchain (@lookonchain) March 23, 2023
Increased fund transfers to exchanges can hint at probable selling pressure once the ARB tokens are released. Yet, it is plausible that these funds are positioning themselves to buy ARB tokens as soon as they hit the market. In any case, this action will likely lead to increased volatility in the Ethereum market in the following days, if not hours.
The Arbitrum airdrop has piqued the curiosity of investors because it signifies the introduction of the token of Ethereum’s largest L2 network. Demand for ARB tokens is projected to surge as more users and developers flock to the platform, possibly causing short-term price volatility for Ethereum and ARB.
At press time, most analysts anticipate a sharp reduction in the ARB’s price due to the large number of “free” tokens that will be handed to users. However, the token’s long-term prospects are unknown and will be determined mainly by the demand for cheaper Ethereum alternatives and the DeFi business in general.
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