See More

Arbitrum (ARB) Faces Network-Wide Decline as Whales Sit on Sidelines

2 mins
Updated by Ryan Boltman
Join our Trading Community on Telegram

In Brief

  • Arbitrum's (ARB) token hit an all-time low of $0.57 on July 5.
  • The network has experienced a significant drop in user demand, with daily active addresses and transactions decreasing by over 46% and 34% since June 21.
  • While ARB's price shows potential for a rebound, a continued decline could see it fall to $0.66.
  • promo

ARB, the native token of the leading Layer 2 (L2) network Arbitrum, has dropped significantly in the past few weeks. On July 5, the altcoin traded at an all-time low of $0.57.

Although ARB’s price has since climbed 22%, the decrease in user demand for the L2 network threatens to erase these gains. 

Arbitrum Witnesses User Exodus

On-chain data has shown a decline in user demand for Arbitrum since June 21. Since that day, the daily count of active addresses involved in at least one transaction on the L2 has plummeted by over 46%

Due to the fall in the count of unique addresses active on the network, the number of transactions completed daily on Arbitrum has also dwindled.

After climbing to a year-to-date peak of 3.5 million, the daily transactions count on the L2 initiated a downtrend. It has since decreased by 34%.

Read More: How to Buy Arbitrum (ARB) and Everything You Need to Know

Arbitrum Transaction Count. Source: Artemis
Arbitrum Transaction Count. Source: Artemis

With fewer transactions completed on the L2, Arbitrum’s network fees and revenue derived from them are at multi-month lows. Arbitrum’s total network fees spiked to an all-time high of $3.4 million on June 20 because the L2 was used as the main coordination chain for the LayerZero airdrop. 

However, following the conclusion of the controversial airdrop, users flocked out of Arbitrum, pushing its network fees down by 98% the following day. 

Arbitrum Network Fees Source: Artemis
Arbitrum Network Fees Source: Artemis

The network’s revenue witnessed a 99% decline during the 24-hour period

Lead Analyst at Santiment, Brian Quinliven, added to the bearish sentiment, insisting that whales could be holding out for bullish momentum before shifting funds around:

“The lack of whale activity looks quite similar to what we have been seeing for Optimism. A gradual decline in big moves isn’t necessarily a bad thing. It simply means they may be waiting for a bit more volatility to really capitalize on before making their moves.” Quinlivan stated.

Arbitrum (ARB) Whale Transactions. Source: Santiment
Arbitrum (ARB) Whale Transactions. Source: Santiment

Quinlivan also added that wallets holding at least one million ARB hold a very high level of Arbitrum’s supply despite the large price decline in 2024.

Arbitrum (ARB) Wallets Holding 1M  vs Price Performance. Source: Sanitment
Arbitrum (ARB) Wallets Holding 1M vs Price Performance. Source: Sanitment

“These key stakeholders clearly feel comfortable hanging on to their coins for the long haul despite its market value dropping a bit over -70% in 6 months.” Quinlivan added.

ARB Price Prediction: Ready for a Rebound?

While ARB’s price has trended downward in the past week, its Chaikin Money Flow (CMF) is in an uptrend. This indicator measures how money flows into and out of an asset. 

When an asset’s price falls while its CMF rises, a bullish divergence is formed. This divergence signals a potential price reversal. It suggests that the selling pressure may be weakening, and the asset might be poised for a price rebound.

If this happens, ARB’s price could increase to $0.72.

Read More: Arbitrum (ARB) Price Prediction 2024/2025/2035

Arbitrum Analysis
Arbitrum Analysis. Source: TradingView

However, if the current decline continues, the token’s price will plummet to $0.66.

Top crypto projects in the US | July 2024
Harambe AI Harambe AI Explore
Uphold Uphold Explore
Exodus Exodus Explore
Coinbase Coinbase Explore
Chain GPT Chain GPT Explore
Top crypto projects in the US | July 2024
Harambe AI Harambe AI Explore
Uphold Uphold Explore
Exodus Exodus Explore
Coinbase Coinbase Explore
Chain GPT Chain GPT Explore
Top crypto projects in the US | July 2024

Trusted

Disclaimer

In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

Untitled-1.png
Abiodun Oladokun
Abiodun Oladokun is a technical and on-chain analyst at BeInCrypto, where he specializes in market reports on cryptocurrencies from diverse sectors, including decentralized finance (DeFi), real-world assets (RWA), artificial intelligence (AI), decentralized physical infrastructure networks (DePIN), Layer 2s, and meme coins. Previously, he conducted market analysis and technical assessments of various altcoins at AMBCrypto, utilizing on-chain analytics platforms like Messari, Santiment,...
READ FULL BIO
Sponsored
Sponsored