Arbitrum (ARB) price rally has reclaimed the $1.15 territory this week, bringing its monthly gains to 30%. On-chain research identifies the major driving factors behind the bullish ARB price action.
Arbitrum’s latest network usage milestone appears to have spurred investors’ confidence in ARB price prospects. Will the bulls hold out for more gains, or book profits early?
Number of Arbitrum (ARB) Funded Addresses Surpasses 15,000 Milestone
Arbitrum price has been in an uptrend since the start of November 2023. On-chain data trends reveal that the bullish momentum has been driven, largely, by investors piling billions into projects hosted on the Arbitrum ecosystem.
According to on-chain data pulled from IntoTheBlock, Arbitrum funded addresses has crossed the milestone 15,000 this week.
The non-zero balance addresses also called funded addresses distinguishes crypto wallets that currently hold some units of ARB tokens, from empty or inactive addresses.
This significant increase in ARB funded addresses indicates increasing global adoption of the Arbitrum network. This is a visible bullish signal that has played a pivotal role in the ongoing ARB price rally.
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Arbitrum Flips Polygon (MATIC) as Largest Layer 2 Network
After months of rapid increase Arbitrum network’s adoption, it has now claimed top spot in the Ethereum scaling sector. In a recent post on X (formerly Twitter), Coingecko research reported that Arbitrum has now surpassed Polygon (MATIC) as the most utilized Layer 2 network.
The chart shows Arbitrum’s Total Value Locked now stands at $1.79 billion, more than double Polygon’s $775.4 million TVL.
Total Value Locked is a financial metric that estimates the aggregated value of all assets invested in projects hosted on a blockchain network. Hence the chart above suggests that crypto investors are now utilizing Arbitrum-hosted services, more than any other Ethereum scaling solution.
This increased demand for Arbitrum-hosted services has, inevitably, spurred market demand for the native ARB token.
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ARB Price Prediction: Is $2 Target Within Reach?
From an on-chain perspective, the increased network adoption is a fundamental driver behind the ongoing Arbitrum price rally. With this key indicator still on an upward trajectory, it puts ARB price in good stead for further gains.
The Global In/Out of the Money (GIOM) data, which groups the current Arbitrum investors according to their entry prices, also confirms this bullish price prediction.
It, however, shows that the bulls must break the initial resistance at $1.40 to be confident of reclaiming $30. As depicted below, 1,710 holders had bought 879,690 ARB at the average price of $1.39. If those investors exit early, they could trigger an Arbitrum price correction.
But if the bulls can scale that sell-wall, the Arbitrum price will likely reclaim $2 as predicted.
Conversely, the bears could negate the optimistic prediction if ARB price retraces below $1. But, in that case, the 1,850 holders that bought 5.08 million ARB at the average price of $1.01 could offer initial support. If those investors HODL firmly, Arbitrum price will likely avoid a larger downswing.
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