Falling price for Arbitrum (ARB) new crypto

Yesterday, ARB, Arbitrum’s governance token, debuted on the crypto markets, and the price came with several surprises.

Given that the token was distributed for free with an airdrop, there was no initial benchmark value.

Taking as a reference the trades on Uniswap, which started immediately after the launch, the first price was around $4, although it turned out to reach a high of $4.7.

However, within just 20 minutes, the price had already fallen below $1.4, making it clear that the initial price of $4 was not really significant.

In fact, the airdrop was a bit slow, due to the huge volume of requests coming in at once at the time of the launch on the Arbitrum Foundation website.

In reality, there was also another way to get them, much more difficult and riskier, but certainly faster, where a limited number of tokens could be received and put on the exchanges immediately.

Instead, when the large wave of sales of tokens received through the Arbitrum Foundation website came after a few tens of minutes, the price inevitably fell, since the demand at that time could also have fallen due to the sudden loss of value.

The low was touched about an hour and a half after the launch, just below $1.1, but it later retreated by practically 30%.

In fact within an hour it was back to $1.4 which is also roughly the current value.

The Price Dynamics of the New Crypto Arbitrage Room (ARB)

In other words, three distinct phases of the price trend of Arbitrum’s ARB token can be identified during the first trading day.

The first phase, which only lasted an hour and a half, is the launch phase, where a limited number of tokens were put up for sale as the airdrop was a bit slow.

At this early stage the price fell, but probably only because the starting price was too high.

Since it lost 76% of its initial value very quickly at this stage, it is more than likely that the initial value was simply overly optimistic.

It was most likely just due to a temporary lack of supply, so as soon as the supply increased thanks to tokens gradually released by flydrop, the price dropped to a level more in line with the next one.

The second phase was even faster, because it lasted only an hour, and was marked trivially by a setback from the excessive descent of the first phase.

It should be noted that this bounce ended almost exactly at the next price level.

In fact, during the third phase, which is still ongoing, the price stabilized and simply continued to lateralize around $1.4.

In other words, this is probably the price to be taken as a reference, while the starting price was only the result of a temporary supply shortage.

The different loss rates

Today, looking at the different price aggregators, we can see that the percentage of losses shown regarding ARB’s first trading day varies.

CoinMarketCap shows -88%, while CoinGecko shows -78%. CoinPaprika shows nothing, because it has not yet been 24 hours since launch, while Binance shows -89%.

The problem is really the starting price, because on different platforms it was different, since there was no official one.

In theory, it would be better to take as a reference the starting price of the platform on which the trade first started, and this appears to be precisely Uniswap.

In fact, on Uniswap, the starting price of around $4 goes by at least seven minutes ahead of the starting price on Binance of $11.1, which is also the starting price shown on CoinMarketCap.

CoinGecko, on the other hand, benchmarks a starting price of $5 just one minute after Uniswap. and clearly shows how the price rose to $11.1 within the first few minutes.

Therefore, it would be better to take as a starting price the one on Uniswap of around $4, although, as mentioned earlier, this is too much affected by a temporary supply shortage to be considered meaningful.

The misunderstanding

This data generates the misconception that yesterday ARB debuted with a big loss in the crypto markets, when in fact it debuted with extraordinary strength. When it reached the price of $1.4, about two and a half hours after launch, the price stabilized and has remained stable until today.

So it would be wrong to say that it debuted at a loss just because the starting price for an hour or so was “inflated” by a temporary lack of supply.

In fact, that price is not a good indicator since it was touched precisely at a time when not all the ARB tokens were actually available in the market yet.

Instead, it would be better to take as a reference for analysis the price affected at the time when the supply shortage was resolved, i.e. about an hour after the trade started. Not surprisingly, that price was then maintained for a whole day.

Thus, ARB’s crypto market debut was by no means negative, but not particularly positive either.

It’s a neutral debut, but nonetheless very important given that many people yesterday competed to sell ARB tokens as soon as they received them for free.