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Arbitrum Reaches Major Milestone In TVL As Price Rallies

Arbitrum (ARB), a layer 2 (L2) protocol has achieved yet another major milestone in its Total Value Locked (TVL) reaching new heights, following a surge in the crypto asset’s price.

Arbitrum Sees Surge In Total Value Locked (TVL)

According to the L2beat platform, Arbitrum’s TVL recently went past the $10 billion mark putting it in the spotlight. Data from the analytics firm reveals that the network’s TVL is currently at $10.36 billion.

L2beat’s report shows that Arbitrum One’s TVL soared by a remarkable 16.49% over the past seven days. With this accomplishment, the network is firmly established as the first Layer 2 network to surpass the $10 billion TVL threshold.

L2beat shows that Arbitrum is above Optimism (OP) by about 40% which comes in second place with a TVL of $6.44 billion. Optimism’s TVL has also increased significantly by 11.63% in the last 24 hours. 

When analyzing Arbitrum’s TVL, Ethereum (ETH) makes up about 30% of the TVL, while the ARB token makes up about 23.68%. Meanwhile, stablecoins make up a substantial portion of 29% of the TVL, with the remaining 15.76% going to other assets. This diverse composition highlights the platform’s increasing popularity and attractiveness to a larger range of users.

In addition, L2beat has also revealed a surge in the network’s market share. The data shows that Arbitrum One’s market share has seen an increase of over 48%. 

So far, the network’s token ARB seems to have experienced a rise in response to the rise in TVL. The digital asset price is currently set at $1.84, indicating a 2.82% increase in the past day.

As of the time of writing, the network’s trading volume has increased significantly by 60% in the past 24 hours. Meanwhile, its market capitalization is up by 1% in the past day, according to data from CoinMarketcap

The price rise is indicative of investors’ increased faith and interest in Arbitrum’s ecosystem. The network’s success also highlights the growing need in the Ethereum ecosystem for scalable and affordable solutions.

Analyst Predicts A Clear Uptrend For ARB

Cryptocurrency analyst Michaël van de Poppe has predicted a clear uptrend for Arbitrum, signaling a possible breakout. The analyst shared his projections for the token on the social media platform X (formerly Twitter).

Related Reading: Arbitrum Network Faces Major Outage, ARB Token Faces 4% Decline

In his analysis, he noted that the uptrend is “taking place with beautiful retests of previous resistances, becoming a support zone.” Poppe further pointed out a possible retest optimal “go-to level” between $1.50-1.60. 

This area denotes a tactical stage where the token might experience a retest before opting to breach the psychological barrier of $2.  However, this will only take place if the ARB continues on the current upward path.

Lastly, Poppe highlighted a difficulty in the token initiating its first cycle when put against Bitcoin. “Against $BTC, this pair barely wakes up and starts its first cycle,” he stated.

With the recent price of Arbitrum sitting at $1.84, it appears that the analyst’s predictions will soon come to pass.

Arbitrum

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Buy Arbitrum Now? ARB Price Displays Relative Strength

The token of the layer-2 solution Arbitrum, ARB, is one of the best-performing cryptocurrencies within the top 100 by market cap over the past seven days. With a gain of 8.5% despite the heavy drawdown in the broader crypto market, the Arbitrum token records the fifth highest price gain over the last week.

Arbitrum Token Shows Relative Strength

Looking at the ARB / BTC chart (2-hour) shows that the Arbitrum token is one of the few altcoins that has recently shown strength against Bitcoin. If BTC sees a rise towards $30,000, it is generally advisable to look for the altcoins that show relative strength at the moment and ARB is definitely one of them.

In the 2-hour chart, ARB/BTC is writing higher highs and higher lows since Monday, May 8. Currently, ARB/BTC needs to break above the 0.00004477 level to continue the trend. If this is successful, stronger resistance at 0.00004620 can be expected. But, a successful breach would be an extremely bullish signal.

Arbitrum ARB/BTC

The 4-hour chart of ARB/USD shows that the price was once again rejected at the 23.8% Fibonacci level at $1.22. This resistance is crucial for ARB at the moment. In order to maintain the uptrend, the price level must be cleared, otherwise a renewed fall towards $1.05 could be on the cards.

If a breakout succeeds, the zone between $1.30 and the 38.2% Fibonacci at $1.33 would come into focus. Strong resistance can also be expected at $1.42, where the 50% Fibonacci retracement level is located.

Arbitrum price ARB USD

Renowned Crypto Traders Are Bullish On ARB

One of the analysts who is bullish on ARB is popular crypto trader @DaanCrypto. The analyst points to the high on-chain transaction volume on Arbitrum, where the layer-2 ranks only behind Ethereum and BSC.

Arbitrum on-chain

Moreover, it is interesting to note that the fully diluted market caps of ARB, MATIC, SOL, OP and AVAX are relatively close to each other, according to the analyst, while the circulating supply is quite different. According to Daan, ARB is still undervalued or less overvalued compared to the other protocols, such as Optimism (OP).

One reason, in addition to ARB’s strong fundamentals, are the scheduled token unlocks: “This is important to note when you’re investing for the longer term. OP for example will be getting some bigger unlocks throughout the year while ARB won’t get any until March 2024”, says Daan, who concluded, “the unlocking schedule & adoption was a reason for me to open this pair trade between ARB & OP.”

Andrew Kang, co-founder of Mechanism Capital, also shares this view. In mid-April, the notorious altcoin whale wrote that “Arbitrum is the fastest growing blue chip chain not yet valued at blue chip status and will rerate to be top of the alt L1/L2 stack.”

His reasoning: When it comes to dApps with real value and innovation, Arbitrum dApps are at the forefront. “While these bullish conditions sustain this year, FDV [Fully Diluted Value] is a meme. Especially considering there are no major unlocks until next year,” added Kang.

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Data Suggests Ethereum Layer-2 Tokens May Experience Explosive Upside

While the Ethereum network and its users continue to suffer from the high fees of the layer-1 blockchain, various layer-2 (L2) solutions are stepping into the spotlight to solve the problem.

As analyst Miles Deutscher explained, citing data from Dune Analytics, layer-2 scaling solutions saw monumental growth in 2022. “I expect this trend to continue in 2023 and beyond,” Deutscher commented.

Ethereum gas L2

Ethereum gas spent to settle L2 transactions. Source: Twitter

Blockchain analytics firm Nansen also released data today showing the growth of layer-2 solutions. Specifically, Nansen referred to Abritrum.

“Arbitrum season is in full swing,” wrote a researcher at Nansen. According to their data, transactions on L2s are increasing significantly, while transactions on Ethereum are decreasing. A clear divergence can be seen.

Arbitrum

Ethereum L1 vs. Arbitrum. Source: Twitter

Regarding Arbitrum, the Nansen researcher writes that the number of daily active addresses averaged 50,000 to 70,000 in November and December. A few months ago, from July to September, the average was 15,000 to 20,000.

With the recent Nitro upgrade, Arbitrum has once again massively lowered its average gas price for a transaction. While the average fee was $0.35 before Nitro, it has dropped to $0.08 afterwards. This represents a reduction of almost 75%.

However, although Arbitrum’s network usage is skyrocketing, there is no token yet. So far, there is also a lack of an official announcement regarding an Arbitrum token.

Rumors have it that Arbitrum will launch its token by the first quarter of 2023 at the latest. The ticker is supposed to be either ARBI or ARB.

The Leading Ethereum L2 Solution

As NewsBTC reported yesterday, Polygon (MATIC) currently holds the leading position when it comes to successful Ethereum L2 tokens. The project has entered partnerships with major brands such as Starbucks, Mercedes, Meta, Reddit, eBay, Disney, and Adobe, among others.

Sandeep Nailwal, co-founder of Polygon, revealed yesterday that the zkEVM mainnet “is coming soon”. With the implementation, Polygon will reach a massive milestone.

Once the zkEVM mainnet comes online, there could be an explosion of dApps on Polygon. Zero-knowledge cryptography will enable privacy and minimize data volumes to make transactions for smart contracts even more efficient.

BitDAO And Optimism

Another emerging L2 project is BitDAO, which is backed by the exchange Bybit. About a week ago, the project had announced the soft launch of Mantle, a modular Ethereum Layer-2 solution with separate execution, finality and data availability layers.

A public test network is scheduled to go live in 2023. It will serve as the core of BitDAO and use BIT as a token.

Optimism also has a token. The L2 Ethereum scaling solution was first introduced in June 2019, and the public mainnet was launched in December 2021.

The OP token’s airdrop took place in June 2022, with nearly 249,000 registered Optimism users receiving the newly launched token. Remarkably, the project’s mainnet is currently hosting the largest decentralized exchange, Uniswap V3.

At press time, the ETH price was sitting just above crucial support in the 4-hour chart.

Ethereum ETH USD 2022-12-08

ETH price, 4-hour chart. Source: TradingView