As the world’s largest altcoin, Ethereum (ETH), rises towards the $4,000 level, Layer-2 platforms have also gained significant momentum. Notably, a Layer-2 network, Arbitrum (ARB), saw a 5% price increase, surpassing $1.25. Arbitrum’s daily trading volume increased by 113%, reaching $840 million, reflecting increased market activity and investor interest.
Growth in Arbitrum’s User Base
Over the past week, the Arbitrum network attracted approximately 10,000 new users. Data shows that the number of wallet addresses holding ARB rose from 1.5 million on May 20 to 1.51 million on May 25. This influx of new users transacting on the network indicates increased demand for ARB, which could lead to further price volatility.
The expectation of strong inflows into spot Ethereum ETFs awaiting final approval is likely influencing Arbitrum’s user retention and market dynamics. Many of the 1.51 million ARB investors are expected to continue holding their assets, hoping for positive outcomes from these inflows. Reduced selling pressure from existing investors and increased demand from new users could potentially push ARB’s price towards the milestone level of $1.50.
ARB Price Analysis
Currently, ARB is striving to surpass the resistance level corresponding to $1.27. Bulls have managed to prevent the price from falling below the 20-day EMA ($1.11), increasing the chances of a successful breakout. If the price breaks the $1.27 resistance, the ARB/USDT trading pair could gain momentum, potentially rising to $1.60 and eventually reaching $1.75.
Conversely, if the price drops sharply below $1.10, this bullish outlook could be invalidated, pulling it towards the strong support level around $0.90. ARB’s price is currently closely following ETH, and the altcoin has similarly risen by 28% over the past week.
As is known, ARB reached an all-time high of $2.4 earlier this year, setting a record. Recent price movements and the growth in the user base indicate positive market sentiment and a strong foundation for future growth. The correlation between Ethereum and Arbitrum highlights the interconnectedness of the cryptocurrency market and how developments in the larger crypto ecosystem can impact Layer-2 networks.
