Arbitrum (ARB) has been making waves in the crypto world as it recently became the 4th largest ecosystem in the market. Despite experiencing a sharp decline of 70% since its airdrop, Arbitrum’s native token has continued to gain attention from investors, currently trading around $1.158, down from $1.1808 on April 18th.

Arbitrum Defies The Odds

According to the Decentralized Finance (DeFi) researcher Deebs, Arbitrum has emerged as a major player in the crypto market, with its Total Value Locked (TVL) soaring to an impressive $2.3 billion. This puts it in 4th position by TVL, surpassing many of its competitors.

Additionally, since the launch of Arbitrum, the value of stablecoins has grown by over $500 million in just two months. At its peak, the network’s active user base reached over 600,000, surpassing Optimism (OP), a fast, stable, and scalable L2 blockchain built by Ethereum developers, and nearly overtaking the blockchain platform designed to host decentralized, scalable applications Solana (SOL).

Despite these impressive metrics, ARB’s price has experienced a significant drop of 70% since its airdrop and has had very little positive price action since. However, DeFi researcher Deebs believes that this dip in price may be a sign of a hidden gem in the crypto market.

One of the main factors that make Arbitrum an attractive investment opportunity is its high TVL, user base, and liquidity. In fact, since its launch, Arbitrum has maintained the highest liquidity of all Layer 2 (L2) networks and is the third highest of all chains on DeFi Llama.

Furthermore, while many other chains have a market capitalization to TVL ratio above 1, Arbitrum boasts one of the smallest ratios at 0.6. This means that the potential price upside for ARB is significantly higher than its competitors, making it an enticing investment opportunity for those looking for long-term gains.

Additionally, ARB’s technology has been praised for its ability to address some of the key issues facing the crypto industry, such as scalability and high transaction fees. ARB’s use of cutting-edge technology such as Optimistic Rollups provides a solution to these problems, making it an attractive option for investors looking for a reliable network with great potential.

Another positive sign for ARB is the amount of support it has received from major players in the crypto industry. This includes partnerships with well-known crypto projects such as Uniswap, Aave, and Chainlink. These collaborations demonstrate that the industry recognizes the value of ARB’s technology and the potential it holds for the future of decentralized finance.

Overall, despite the recent drop in price, ARB’s strong fundamentals and growing network usage suggest that it is a hidden gem in the crypto market. Its partnerships with major players in the industry, as well as its innovative technology, make it a promising investment opportunity for those looking to capitalize on the potential of decentralized finance.

Featured image from Unsplash, chart from TradingView.com

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.

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.

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.

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.”

$ARB / $OP Pair Trade going strong.

Well on it’s way to my target of $ARB being 2x the Fully Diluted Valuation of $OP. https://t.co/uJSKilhc0u pic.twitter.com/z635BpCztr

— Daan Crypto Trades (@DaanCrypto) May 15, 2023

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.

Featured image from soliditydeveloper.com, chart from TradingView.com

Arbitrum (ARB), one of the recently launched Ethereum-based Layer 2 scaling solutions, has seen a surge in its price by almost 10% in the past 24 hours. The surge comes when the global crypto market seems to be in an upward trend. However, the Arbiturm spike can be tied to a different factor.

The recent increase in ARB’s value can be linked to the protocol’s announcement about how it plans to manage the fees generated on its platform.

Arbitrum Update On DAO Revenue

In the Twitter announcement posted earlier today, the Arbitrum team noted it is “the only rollup that sends all surplus revenue generated by transaction fees to their respective DAO. It is time for the DAO to collect the funds so far.”

Notably, the Arbitrum protocol allows users to transact on the platform with reduced transaction fees and faster speeds than the Ethereum network. The protocol requires users to pay a fee when transacting on the network.

The fee paid is split into two sections, including Layer 1 (L1) fees for covering transactions on Ethereum and L2 fees for Arbitrum fees. As per the protocol’s mechanism, surplus tokens are generated by the fees and are accumulated before being sent to the DAO.

The DAO revenue mechanism on Arbitrum now enables token holders to reap the rewards of accumulated surplus fees. When the organization collects the tokens, members of the Arbitrum community DAO will receive their share of the fees. This substantial increase in benefits has contributed to the current surge in the token’s value and the value of becoming its long-term holder.

It is worth noting that the distribution of rewards resulting from this development will benefit members of the Arbitrum community DAO, which could lead to a significant increase in demand for ARB as users aim to capitalize on the opportunity to earn rewards.

ARB Surges Nearly 10%

Following the DAO revenue mechanism announcement, the price of ARB has recorded a bullish uptick, up by 8.7%, with a trading price of $1.19 at the time of writing. The assets have also seen a surge in its market cap, surging by over $100 million in the past 24 hours.

Despite the surge, Arbitrum has fallen from its previous rank of #32 among the global crypto market to ranking #38. However, according to the activity in its trading volume, the token might soon be quick to reclaim its spot.

CoinMarketCap data shows Arbitrum’s trading volume hasn’t moved much in the past 24 hours. Instead, it has only continued to range between $300 million and $400 million, indicating a possible accumulation.

Notably, the DAO revenue mechanism incentivizes platform users to hold ARB tokens, and it could increase the demand for ARB. This, in turn, will benefit the protocol and its users as it increases the network’s value and liquidity.

Featured image from iStock, Chart from TradingView