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Arbitrum’s Tier 2 Solution Token, ARB, is one of the top performing cryptocurrencies in the top 100 by market capitalization over the past seven days. With an 8.5% gain despite a massive drawdown in the broader cryptocurrency market, Arbitrum token has the fifth largest price gain in the past week.
Arbitrum Token Shows Relative Strength
Looking at the ARB/BTC chart (2 hours), Arbitrum token is one of the few altcoins that has recently shown strength against Bitcoin. If BTC sees a rise to $30,000, it is generally recommended to look for altcoins that are showing relative strength at the moment, and ARB is definitely one of them.
On the 2-hour chart, ARB/BTC has been showing higher highs and higher lows since Monday, May 8th. Currently, ARB/BTC needs to break through the 0.00004477 level to continue the trend. If successful, we can expect stronger resistance at 0.00004620. But a successful breakout would be extremely bullish.
ARB/BTC is up, 2-hour chart | Source: ARBBTC on Tradingview.com.
The 4-hour ARB/USD chart shows that the price has deviated again from the 23.8% Fibonacci level at $1.22. This resistance is critical for the ARB at the moment. To keep the uptrend going, the price level needs to be cleared, otherwise another drop to $1.05 could occur.
If the breakout succeeds, the focus will be between $1.30 and the Fibonacci 38.2% at $1.33. Strong resistance can also be expected at $1.42, where the 50% Fibonacci retracement level is located.
ARB price, 4-hour chart | Source: ARBUSD on Tradingview.com.
Prominent Crypto Traders Optimistic About ARB
One analyst bullish on ARB is popular crypto trader @DaanCrypto. The analyst points to the high volume of transactions on the network at Arbitrum, where Tier 2 is second only to Ethereum and BSC.
Arbitrum Network Volume vs. Fully Diluted Market Cap | Source: Twitter @DaanCrypto
In addition, it is interesting to note that the fully diluted market capitalizations of ARB, MATIC, SOL, OP and AVAX are relatively close to each other, according to the analyst, while the circulating supply is very different. According to Daan, ARB is still undervalued or less overvalued compared to other protocols such as Optimism (OP).
One reason, apart from the strong fundamentals of ARB, is the planned token unlock: “This is an important thing to consider when you are investing for the long term. OP, for example, will get more unlocks throughout the year, while ARB won’t get them until March 2024,” says Daan, who concluded, “The unlock schedule and implementation was the reason for me to open this pair deal between ARB and OP. . “.
— Daan Cryptocurrency Trades (@DaanCrypto) May 15, 2023
Andrew Kang, co-founder of Mechanism Capital, also shares this view. In mid-April, the infamous altcoin whale wrote that “Arbitrum is the fastest growing blue chip network not yet priced blue chip and will be revalued to become the top of the L1/L2 altcoin stack.”
His reasoning: When it comes to dapps with real value and innovation, Arbitrum dapps are at the forefront. “While these bullish conditions will continue this year, the FDV [Fully Diluted Value] is a meme. Especially since there won’t be any major unlocks until next year,” Kang added.