The Arbitrum price crash shocked traders after a sharp drop of almost 10% within a day. The fall comes shortly after a strong rally last week, where the token saw a rise of almost 20% in a day. Now the excitement has reduced, and the question is, what caused this sudden decrease? 

From Hype to Sell-Off 

The Arbitrum price crash started after a huge surge, post the big update, Robinhood confirmed its partnership involving Layer-2 blockchain tech, which sparked massive interest last week. Traders were excited about the fireside chat at Cannes Lions featuring Vitalik Buterin and Robinhood Crypto’s General Manager. The rumors of Robinhood using Layer-2 for stock trading in Europe had pumped prices fast. 

But as soon as the news was confirmed, the token’s value started falling. This is a common event in crypto markets, often called “sell-the-news.” Traders buy early during rumors and sell once the news goes public, locking in profits.  

Whale Transfers Increase Selling Pressure

The Arbitrum price crash got worse after big investors moved their tokens. As per the reports from Wu Blockchain, on-chain data shows that Paradigm Capital and early investors deposited around 16.75 million tokens, worth nearly $5.85 million, to Binance and Coinbase. These moves happened within just 12 hours and signaled that more selling was likely. 

Source: Wu Blockchain

This whale activity pushed down buying pressure even more. The 24-hour trading volume dropped slightly by 0.596%, falling to $649 million, suggesting fewer people were interested in buying.

Last Week’s Big Rally Now Fades

The Arbitrum price crash feels even more painful because of how fast the token had climbed. Last week, the price jumped 20% in a single day and was up more than 40% in seven days.

That rally was driven by two big events. First, the Robinhood rumors excited the market. Second, Gemini launched tokenized U.S. stocks using the same blockchain, starting with MicroStrategy (MSTR). This added real-world utility and brought attention from investors.

Overall Market Adds to the Pressure

This Arbitrum price crash didn’t happen in isolation. The entire crypto market also saw a drop. The total crypto market cap reduced by 1.21% within 24 hours. When the whole market is weak, it often hits tokens that recently had big gains the hardest.

What Comes Next?

On the daily chart, the altcoin price is trading on a channel line, yesterday it touched the upper boundary. After news of the whales' news, the price fell to cross the channel and fell back and down by 10%. If the price fails to hold the selling pressure, then the price might take support 0.300 or 0.240 which is the previous low made on 7th April 2025. Technical resistance near $0.385 (23.6% Fibonacci level) and bearish MACD divergence. The altcoin is now trading at $0.3236 as per the CoinMarketCap.  

Source: CoinMarketCap

Following such a steep decline, some investors are on the lookout for a reversal. But with whales selling and momentum bearish, most are being cautious. Currently, it seems that the hype surrounding the Robinhood news has cooled off, and investors are on the lookout for that next big thing to buy. 

Final Thoughts

This Arbitrum price crash demonstrates just how quickly things can turn around in crypto. Last week was all about hype, with collaborations and new features commanding the headlines. But just the day after, the whales are selling out big time, and the broader market dips. For traders, it's a reminder that hype can turn on its head overnight and that whales have the power to transform everything in an instant.


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