- On April 23, the Arbitrum (ARB) price dropped by around 3% on a daily chart, pushing its value down to $0.1270 following turmoil in the DeFi sector due to the Kelp DAO hack.
- Earlier, the Arbitrum Security Council had achieved success in freezing 30,766 Ethereum tokens that were linked to the hack.
- The price is currently revolving around an important low of $0.121, and if it falls below this level, it could lead to a new low.
On April 23, the Arbitrum (ARB) price witnessed a drop of around 3.26% in the last 24 hours, declining its value from $0.1319 to $0.1270.
At the time of writing, the ARB price is trading at around $0.1269 with a market capitalization of approximately $766.76 million, according to CoinMarketCap. The daily trading volume rose by 17.48%, revolving around $112.82 million.
This drop in the Arbitrum ARB-2.74% is showing that traders are being very careful in the Layer 2 scaling sector. Despite this drop in the crypto market, the network is still seeing some good activities.
KelpDAO Hack and Lazarus Group Attack Hit Arbitrum Hard
The main reason behind this recent drop is the aftershocks of the KelpDAO security incident after the bizarre cyber attack. This is the largest DeFi exploit of this year.
On April 21, attackers who are linked to the Lazarus Group managed to steal around $293 million. They did this by targeting a single verifier weak point in the protocol cross-chain messaging system. Arbitrum is working as a major hub for liquid staking assets like rsETH.
Because of this, the shock from the event sparked a huge rush of money being removed from the network. More than $13 billion in Total Value Locked (TVL) was pulled out of the ecosystem within 48 hours. Users rushed to lower their risk in the situation of any further damage.
In order to avoid this, the Arbitrum Security Council has taken quick action and frozen 30,766 Ethereum tokens that were linked to the hack. However, once again, such hacking incidents are damaging users’ trust in DeFi and raising questions about security lapses in decentralized infrastructure. A similar drop was also seen in other cryptocurrencies like AAVE.
Technical Levels Show Support at $0.121 and Resistance at $0.135
According to the current price chart and technical analysis, Arbitrum is now testing very important levels. These levels are expected to decide the direction of the token for the coming month.
The price is currently revolving around an important low of $0.121. This is the most immediate and vital support line for the asset. If the price fails to stay above this level, it could plunge toward the all-time low of $0.09. This law is also confirmed by the lower edge of the Bollinger Bands.
On the other hand, Arbitrum might face strong resistance at around $0.135. In the past, the cryptocurrency failed to break this level due to heavy selling pressure.
According to the TradingView price chart, the Relative Strength Index (RSI) is currently hovering around 56. This shows that the cryptocurrency is currently in a neutral state without entering into overbought and oversold territory. It means that the cryptocurrency currently has no sign of reversal in the trend.
While this drop is creating selling pressure on Arbitrum, there is another factor that could affect its price. On May 16, approximately 92.65 million ARB tokens will be released. The cumulative value of these tokens is around $11 million. This could create more downward pressure if demand does not go up by the same amount.
However, there is a strong institutional adoption as Robinhood has decided to build a dedicated blockchain using the Arbitrum technology stack for tokenized assets. Tokenization is one of the rapidly growing sectors right now, which currently holds around $18.44 billion in market capitalization.
Also Read: Uniswap Price Drops 5% as it Risks Breaking $3.22 Support
Credit: Source link