Arbitrum: With rising whale interest, here’s how the protocol is faring
- Whale interest surged in ARB despite a fading limelight in the Layer 2 (L2) sector.
- ARB’s price struggles, network metrics decline.
In the ever-evolving world of blockchain technology and cryptocurrencies, trends can shift quickly. Arbitrum[ARB], once a beacon of the Layer 2 (L2) sector, found itself overshadowed by newer protocols. Despite this, a recent surge in whale interest has brought fresh attention to Arbitrum’s native token, ARB.
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Whales show interest
Lookonchain’s data revealed that a prominent whale recently made significant moves within the ARB market. This whale invested 800 ETH, equivalent to $1.31 million, to acquire 1.47 million ARB tokens at a unit price of $0.89.
Interestingly, this wasn’t their first foray into ARB. In mid-August, they purchased 1.27 million ARB tokens at $1.16 per token. Unfortunately, they sold these tokens at a loss, amounting to approximately $35,000 when ARB’s price dipped to $1.13 on Binance.
However, despite this renewed interest from whales, the ARB token’s price trajectory hasn’t been encouraging. Over the past month, ARB’s price exhibited a series of lower lows and lower highs, painting a bearish picture. As of the latest data, ARB was trading at a meager $0.891.
Notably, not only did ARB’s price perform poorly, but network metrics also raised concerns. The network growth of ARB took a noticeable hit during this period, suggesting a waning interest from new addresses.
Moreover, the velocity of the ARB token fell, indicating a decline in the token’s trading frequency. These developments could potentially exert further downward pressure on ARB’s price in the future.
Examining the overall state of the Arbitrum protocol, a decline in activity became apparent. Over the past month, activity on the network decreased by 8.2%, while revenue plummeted by a staggering 22.1% according to data provided by Token Terminal.
The DeFi sector within Arbitrum also felt the impact of these challenges. Total Value Locked (TVL) and decentralized exchange (DEX) volumes both experienced significant declines in recent weeks. These indicators suggest a broader downturn in DeFi activities within the Arbitrum ecosystem.
Realistic or not, here’s ARB’s market cap in BTC terms
Amidst these challenges, there was a glimmer of hope for Arbitrum. Offchain Labs has launched the public Testnet for Arbitrum’s Stylus, offering developers a promising tool. Arbitrum Stylus enables developers to build applications on the Nitro chain while enjoying reduced gas costs.
It also facilitates the use of Ethereum Virtual Machine (EVM) contracts for faster execution on the blockchain. This development may inject new life into the Arbitrum ecosystem, potentially revitalizing its appeal to users and developers alike.