Arbitrum's ARB Token Dominates Ethereum Layer 2 Sector, Bullish Growth Expected
Summary:
Arbitrum's native token, ARB, has led in growth within the Ethereum layer 2 sector, presenting a 49.49% increase over the past month. Despite a downturn in altcoin markets, ARB may resume its bullish growth. Cryptocurrency data shows Arbitrum dominates Ethereum layer 2 Total Value Locked (TVL) with trading volumes exceeding $3.3 billion. The anticipated Ethereum Dencun upgrade is expected to lower transaction costs and amplify data availability for layer 2 rollups like Arbitrum, promoting optimism for further growth.
Arbitrum's native token, ARB, has outpaced its competitors in the Ethereum layer 2 arena, enjoying a 49.49% increase over the last month. Despite recent market turbulence affecting altcoins, historical trends suggest that ARB may recoup its bullish run. As per birdeye.so, Arbitrum currently reigns supreme in Ethereum layer 2 Total Value Locked (TVL), with ARB performing better than comparable tokens such as Optimism, Binance Coin (BNB), and Solana (SOL) which grew by 47%, 25%, and 19% respectively over the same period.
CoinMarketCap data highlights ARB's staggering trading volume, exceeding $3.3 billion following a 3000% surge within a month. L2Beat data asserts Arbitrum's command over Ethereum layer 2 TVL, claiming an astonishing 49.86% of the total $20.92 billion. Arbitrum's TVL has been consistently rising in the last quarter, showing a 45% increment from $1.66 billion in October 2023 to the present $2.41 billion according to DefiLlama, a DeFi data aggregator.
Referring to DappRadar, the Layer 2 protocol maintains a varied asset portfolio encompassing 30.9% Ethereum (ETH), 23.68% ARB tokens, 29.66% stablecoins, and 15.76% in miscellaneous assets. The Ethereum Dencun upgrade, proposing changes via EIP-4844 – Proto-Danksharding, promises to lower transaction costs and gas fees per transaction while enhancing network capacity, which will ultimately benefit the end-users.
Layer 2 rollups like Arbitrum are set to profit from the Dencun upgrade as it proposes to amplify data availability and reduce on-chain data storage costs, thereby improving block space. This amendment would result in efficient and economical operations, crucial to layer 2 solutions reliant on optimal Ethereum data management.
Perceiving the upcoming Dencun upgrade incorporating EIP-4844 and proto-danksharding, investors have propelled the native token for the layer 2 scaling solution Arbitrum, ARB, to a record high on the morning of January 2, 2024.
Ethereum's positive public perception has been reinforced, ushering in price surges for scaling solutions like Optimism (OP) and Arbitrum. Post an all-time ARB price high of $2.11 on January 4, the price receded due to profit booking by sellers and a wider crypto market adjustment. Despite these setbacks, a bullish pattern is visible on the daily chart indicating the potential for further growth.
The ARB bulls are encountering resistance at the bull flag's higher limit at $1.826 with any daily close above this level signifying a potential breakout, and a subsequent rise to $3.60. A surge of this importance would equate to a 116% increase from the current price. Despite the downward pressure from bearish forces, buying support is expected at the lower limit of the bull flag at $1.54. Additional support could be drawn from the key support zone between $1.17 and $1.38, where all the EMAs are lying.
The sentiment in the market continues to be bullish as indicated by the 50-day EMA, 100-day EMA, 200-day EMA, and the RSI. The price strength index of 55 still denotes a bullish dominance in the market.
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Published At
1/10/2024 1:15:00 AM
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