Arbitrum (ARB) price has consolidated above $1 despite gloomy predictions in the build-up to its $120 million airdrop in April. Three months later, on-chain data shows that Abritrum has sustained high network growth and usage traction. Will Arbitrum bulls now set sights on new all-time highs?
Arbitrum’s $120 million “DAO Airdrop” on April 25 was one of the most anticipated crypto events in Q1 2023. It rewarded early adopters and marked the Ethereum Layer-2 (L2) protocol’s “official transition” into a DAO governance model. The decentralized governance model allows holders to vote on important matters affecting the Arbitrum One and Arbitrum Nova networks.
Historically, blockchain projects often see all metrics of on-chain activity and value transfer decline sharply once the post-airdrop dust settles. But remarkably, Arbitrum appears to have deviated from this rhetoric.
Three months after the April 25 airdrop, Abritrum has sustained high user activity and network growth levels. Here’s how this could impact Arbitrum’s price going forward.
Arbitrum Network Growth Maintains Upward Trajectory
11,312 new users joined the Arbitrum network on April 25, when 90 million ARB tokens worth $120 million were distributed. In June 2023, Arbitrum continued to attract similar levels of Network Growth.
The Santiment chart below shows that ARB Network Growth reached a monthly peak of 12,451 new addresses on June 16.
In simple terms, Network Growth measures user acquisition rate by summing up the daily number of new wallet addresses created on the blockchain network.
Notably, the Arbitrum Network Growth has increased considerably in the last three consecutive trading by 46%. On June 18, Arbitrum recorded 3,252 new addresses. And at the close of June 21, the user base had grown by 4,747 new wallet addresses.
As seen above, the growing network traction has already positively impacted the ARB price this week. If it continues on this trajectory, ARB price will likely reach a new all-time high soon.
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ARB Investors are Showing Long-term Commitment
Furthermore, ARB holders’ long-term commitment level also validates the bullish outlook. The Santiment chart below shows that ARB Age Consumed has dropped significantly over the last 3 months.
In fact, since the start of June, it has declined by 95%, from 4.9 billion on May 31 to 250.71 million at the close of June 21.
Age Consumed evaluates the number of recently moved coins multiplied by the number of days spent in their previous wallet addresses. When it drops considerably, as seen above, it indicates that investors are holding their coins for much longer.
In conclusion, an upward trend in Network Growth and Age Consumed even after a major airdrop means that investors are confident in the long-term viability of the Arbitrum ecosystem.
ARB Price Prediction: The $1.10 Support Is Critical
Considering the aforementioned factors, the ARB bulls will look to establish strong support around $1.10 as they look to target a new all-time high.
The current ARB Market Value to Realized Value (MVRV) ratio suggests that the majority of crypto investors that bought ARB in the last 30 days are holding on to unrealized losses of about 3%.
Historical data suggests they are likely to book some profits once the price reaches $1.20.
However, ARB could rally toward $1.35 if the bullish scenario plays out before the bears regroup.
On the flip side, the bears could negate the bearish Arbitrum price prediction if it drops below the support cluster around $1.10. However, holders could stop selling at that zone as they desperately look to avoid falling into a net-loss position.
Nevertheless, if that $1.10 support does not hold, ARB could face further downward pressure toward $1.
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Disclaimer
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