Analyzing Arbitrum's 11% Rebound – Is ARB Poised for $0.31?

Summary:
Arbitrum One has emerged as a significant Layer 2 solution within the Ethereum ecosystem, and the price of ARB has risen by over 11% in the last 24 hours coinciding with a broader market uptrend of around 7%. This increase indicates a potential bottoming out for ARB, supported by growing network activity and demand.

Key Takeaways

Arbitrum's token ARB rose over 11% in the past day, reflecting a larger crypto market rebound.
A double bottom pattern is forming on the ARB price chart, signaling possible bullish movement.
Network activity on Arbitrum has surged, with over 2 million active addresses, marking a 135% weekly increase.
The Total Value Locked (TVL) on the Arbitrum chain has increased by 7% to approximately $6.53 billion.
Price momentum and network activity are crucial for ARB to break the $0.24 resistance level.

Arbitrum

Is ARB Forming a Bottom?

The 4-hour price chart indicates that ARB is developing a possible double bottom following the prior day's market downturn. Bullish investors have successfully driven the token's price from $0.19 to $0.24. However, the $0.24 resistance zone represents a crucial point that must be crossed for a bullish reversal.

The trend strength is evident, as the momentum indicator has shifted from negative territory to a value of 0.0292. Nevertheless, the momentum remains weaker than that of many other altcoins. While there is some capital inflow, bullish momentum has yet to establish dominance; the Chaikin Money Flow (CMF) currently stands at -0.16.

ARB Chart
Source: TradingView

A breakthrough past the resistance level could lead ARB's price toward the $0.311 target, supported by strong fundamentals and network activity, provided that demand for ARB tokens remains high.

Significant Increase in Network Activity

Arbitrum has demonstrated impressive growth among Ethereum Virtual Machine (EVM) chains this past week. Active addresses surpassed 2 million, marking a 135% weekly increase according to data from Nansen.

Source: Nansen

Though the BNB Chain leads with nearly 14 million active addresses, Arbitrum's growth trajectory remains notable, especially as its developer activity has reached new heights over the last three months. As a result, trading volume for all decentralized applications (dApps) on the Arbitrum One chain soared in the last 24 hours, with over 900 dApps—including Uniswap—collaboratively generating a remarkable daily volume of $1.20 billion.

TVL, DEX, and Perpetual Volumes Overview

The Total Value Locked (TVL) on the Arbitrum chain has remained relatively stable since early December, but recent data shows an increase of about 7%, bringing it to approximately $6.53 billion. In contrast, the volumes for perpetual contracts and decentralized exchanges (DEXs) have held steady at around $639 million and $607 million, respectively, at the time of reporting. In November, these metrics experienced several spikes.

TVL Chart
Source: DefiLlama

Traders remain focused on whether price momentum and network engagement can support a breakthrough above the $0.24 neckline. If ARB fails to achieve this, it may continue to fluctuate within its recent price range.

Final Thoughts