Having initially enjoyed frequent minutes under Mikel Arteta, the former Bolton Wanderers protege has been pushed down the pecking order over the past couple of years.
Ben White, Gabriel Magalhaes and Takehiro Tomiyasu were all preferred in the 2021-22 season, and the breakthrough of William Saliba this season restricted Holding's game time further.
A serious back injury to Saliba opened the door for Holding to return to the first XI for the final few weeks of the 2022-23 season, but the 27-year-old has since lost his place to January arrival Jakub Kiwior on the back of perceived poor performances.
Holding is only under contract at the Emirates until 2024 with the option of a further 12 months, but the Englishman is not expected to reignite his career under Arteta next season and could soon be on the move.
According to Football Insider, Arsenal are open to offers for the centre-back in the upcoming window and will let him leave if a suitable replacement can be signed.
The report adds that Arteta plans to revert White to a central defensive role for the 2023-24 season, in spite of his consistent performances on the right-hand side this season.
As a result, the Gunners could try to sign a new right-back given Tomiyasu's ongoing injury problems, with Ajax's Devyne Rensch thought to be admired by the Gunners hierarchy.
Arsenal are also believed to be keen on RB Leipzig centre-back Mohamed Simakan, and a deal for the Frenchman or Rensch would open the door for Holding to depart.
The former England Under-21 international was brought to North London by Arsene Wenger in 2016, joining the Gunners in a £2.6m deal on the back of being named Bolton's Player of the Year for 2015-16.
Holding has since come up with five goals in 162 appearances for Arsenal in all tournaments, scoring twice in 24 games this season against Manchester City and Bodo/Glimt.
The Englishman started and completed the full 90 of Arsenal's 2-1 FA Cup final win over Chelsea in 2017, where both he and Per Mertesacker earned plaudits for their displays at the back.
Holding won another FA Cup with the North London giants in the 2019-20 season, also starting in the final against Chelsea, and he has two Community Shield triumphs to his name from his time in North London.
However, the former Bolton starlet has just six Premier League starts to his name this season and played just 17 minutes of top-flight football before Saliba entered the treatment room.
Holding could therefore make his final appearance for Arsenal in Sunday's clash with Wolverhampton Wanderers, although he will likely be named on the bench, having been an unused substitute in each of the Gunners' last three top-flight affairs.