The Ethereum-based layer 2 network Arbitrum has demonstrated notable strength in the market, with its native token, ARB, showcasing significant outperformance compared to various other smart contract tokens over the past 30 days.
Data from CoinMarketCap indicates that ARB has surged approximately 75% during this 30-day period, surpassing the performance of tokens such as Optimism’s OP, Solana’s SOL, and Binance Coin (BNB).
Arbitrum’s dominance in terms of total value locked (TVL) among layer 2 networks built on top of Ethereum is cited as a key factor contributing to its robust performance in the market. Total value locked is a metric that represents the total value of assets staked or utilized within a particular blockchain network.
According to data from decentralized finance tracking platform L2Beat, Arbitrum has established a dominant market share of 49.17% among layer 2 networks. This far surpasses the second contender on the list, Optimism Mainnet, which holds a 28.85% market share.
Arbitrum has exhibited a consistent increase in its Total Value Locked (TVL) since at least October of the previous year. The TVL has risen by approximately 50%, starting from $1.66 billion in October to the current value of $2.51 billion, as indicated by data from DeFi tracking site DefiLlama.
The upcoming Ethereum Denouement upgrade, incorporating changes proposed by EIP-4844, is anticipated to reduce rollup transaction costs. This is expected to benefit layer 2 solutions like Arbitrum by lowering gas fees and improving network capacity.
Bullish chart pattern for Arbitrum
Despite experiencing a recent pullback from its all-time high of $2.11 on January 4, the daily chart for ARB, the native token of the Arbitrum network, suggests a potential bull flag formation.
A bull flag is typically considered a continuation pattern, indicating that the price might resume its previous bullish trend once it breaks out of the pattern.
As of the current writing on Wednesday, ARB is trading at $1.95, showcasing an impressive 11.7% increase over the past 24 hours and a 3% increase over the past 7 days. The potential bull flag formation could be a signal of potential upward momentum in the near future.
