- Arbitrum [ARB] has reached an all-time high TVL of $5 billion and shows bullish momentum with a potential breakout past $1.2.
- Analysts see ARB as undervalued compared to competitors, with catalysts like Timeboost and institutional interest.
Arbitrum [ARB] has achieved a significant milestone, with its total value locked (TVL) reaching an all-time high of $5 billion. This surge can be attributed to the growing investor interest and confidence in the Ethereum layer two solutions. The achievement is particularly encouraging for the project’s prospects, particularly given that it comes amid a technical upside break from a long-term consolidation period.
Supporting the bull run, Arbitrum has given a golden cross on its technical charts, which is often considered a bullish indicator. However, the token is now closing in on a crucial resistance level at $1.2, which may define its short-term direction well.
Technical Indicators Signal a Bullish Outlook
Arbitrum has moved out of a two-year long rectangular consolidation pattern which is being seen as a positive sign by traders. This breakout, however, has the $1.2 level remaining as a key level of interest. Technical analysts suggest that a sustained move past this level could open the door for ARB to eye $2.2.
As of the time of writing this, ARB was trading at $0.95, a 10% drop in the last 24 hours. Still, the Relative Strength Index (RSI) stood at 62.3, which points towards a strong bullish sentiment in the short term. This resilience indicates the buyers are still in the driver seat even at the lower prices. Further, the golden cross formation strengthens the bullish outlook, pointing to the possibility of continued upward movement in the coming sessions.
Investor Engagement on Arbitrum
Arbitrum’s daily active addresses are currently at 22,500, which represents the consistent use of the platform. Although this level of engagement is relatively moderate, it also has some potential for further improvement. More participation of the user could enhance the trading volume thus enhancing market conditions and increasing investor confidence.
The Open Interest Weighted Funding Rate for ARB contracts is positive at 0.0355 meaning the future traders are positive. This metric shows increasing optimism towards the token with investors entering longs positions.
Analysts See Potential for 125% Gains
Analysts suggest that Arbitrum may be undervalued in comparison with other altcoins, and the coin may grow by 125% if it reaches the projected high in 2024. Mechanism Capital’s Andrew Kang has recently said that ARB is still “fundamentally undervalued” compared to other Layer 1s such as Sui, AVAX and Tron. He pointed out that whereas ARB trades at a fraction of these altcoins, it registers higher volumes and TVL than the two.
He also noted that institutional investors are interested in the altcoin and that Ethereum is actively working on interoperability as a positive factor for the token. Also, Ryan Connor of Blockworks Research highlighted Arbitrum’s Timeboost, a priority transaction ordering mechanism, as a key driver. Timeboost is expected to lead to higher network utilization, a situation that the analysts believe has not been fully reflected in the market.
AR’s performance has also been associated with other trends in the Ethereum market by market analysts. QCP Capital has observed that Ethereum usually gains new all-time highs in January after a halving year.
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