Arbitrum TVL, ARB Price Doubles in One Month — What’s Next?
After posting a 49.49% move last month, RB, the native token of Arbitrum, a layer 2 Ethereum scaling platform, is the leader in the sector.
While last week's market price action had a negative impact on the price of altcoins and ARB, the longer-term data suggests that ARB may continue its bullish momentum.
The Ethereum layer 2 decision to regulate TVL
ARB has outperformed other popular tokens such as Optimism, Binance Coin (BNB) and Solana (SOL), which have gained 47%, 25% and 19% respectively, but at the same time, what is behind ARB's recent strength?
According to data from CoinMarketCap, ARB's trading volume recently surpassed $3.3 billion after growing roughly 3,000% in just one month.
According to data from L2Beat, Arbitrum dominates Ethereum's Layer 2 TVL, accounting for 49.86% of the total $20.92 billion.
According to data from DeFi data aggregator Defilama, Arbitrage's TVL has been increasing over the past three months, rising more than 45 percent from $1.66 billion in October. In the year Value to $2.41 billion by 2023.
Layer 2 Protocol holds a diversified asset portfolio consisting of 30.9% Ethereum (ETH), 23.68% ARB tokens, 29.66% stablecoins and 15.76% other assets.
The upcoming Ethereum Dankkun update will include the changes proposed in EIP-4844 – Proto-Danksharding – which will reduce the costs of sharding transactions, which will be passed on to end users. This is expected to reduce the gas bill per transaction and improve network capacity.
Related: ICP, ARB, STX and MKR Flash Signals as Traders Await Bitcoin ETF Approval
With this proposal, Denkun is expected to increase data availability, especially for layer 2 scrolls such as Arbitrum.
The upgrade reduces the cost of storing data on-chain and improves block space. This results in more efficient and cost-effective operations, including the operations of Layer 2 solutions based on decentralized data management on Ethereum.
Investors are looking forward to the upcoming Denkun update EIP-4844 and the Layer 2 shard solution Arbitrum, which includes proto-dankun sharding, has reached an all-time high. @httpsageyd reportshttps://t.co/VbfB03eYSN
— Laura Shin (@laurashin) January 2, 2024
This has contributed to the positive sentiment around Ethereum. As a result, display solutions such as Optimum and Arbitrum have seen significant price increases.
Is ARB's bully flag a hint of things to come?
After reaching an all-time high of $2.11 on January 4th, ARB prices recovered as sellers booked profits and the broader crypto market corrected.
Despite the correction, a bull flag can be seen on the daily chart, suggesting a continuation of the uptrend.
ARB bulls face resistance from the flag's upper boundary at $1.826. A daily candlestick above this level indicates a possible breakout from the chart formation, which will rise to $3.60. Such a move represents a departure of 116% from the current price.
The 50-day EMA, 100-day EMA, 200-day EMA and Relative Strength Index (RSI) are all looking up, suggesting that the market is still bullish. Price strength at 55 indicates that the bulls are still in control of the market.
Bears, on the other hand, could push the price lower at the flag's lower limit of $1.54, providing the first line of defense. Additional support lines could emerge from the $1.40 psychological level and the major support zone between $1.17 and $1.38, which are all exponential moving averages.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
