• The Ethereum L2 token Arbitrum recently established a record-high at $1.60 on March 23rd, however the price has since dropped by almost 20%.
• Similar to Polygon’s market debut, MATIC rose 1,350% after facing a brutal selloff in its early days of trading.
• With several leading DeFi protocols such as GMX and Uniswap already utilizing the Ethereum L2 token, Arbitrum’s total value locked (TVL) across pools has risen to $2.2 billion over the past three months.
Arbitrum Price Taking Cues from Polygon
Ethereum layer-2 token Arbitrum (ARB) recently established a record high of $1.60 on March 23rd, however its price has since dropped by nearly 20%. According to independent market analyst Mac, the cues for a bullish Arbitrum token could be traced back to its Ethereum L2 rival Polygon’s market debut. MATIC started trading on Binance on April 26th 2019 at $0.0026 per token before rallying 300% and then wiping out 70% of those gains in a market correction just two weeks later. However MATIC/USD regained upside momentum afterwards rallying by nearly 1,350% to $0.045 on May 21st 2019.
Strong Fundamental Backing
From a fundamental perspective, Arbitrum is becoming an increasingly strong contender in the Ethereum L2 space with many leading DeFi protocols including GMX, Uniswap, Sushi and Aave already utilizing ARB’s services. Dustin Teander from analytics firm Messari noted that looking at user retention metrics it was apparent these protocols have gained above-market traction compared to imported protocols like Uniswap or Aave.
Total Value Locked Across Pools
As of March 29th 2021 the Total Value Locked (TVL) across all Arbitrum pools had risen to $ 2. 2 billion versus around $981 million three months ago according to data resource Defi Llama.
Price Predictions for April
Based on current trends and fundamentals Mac believes that ARB’s price trajectory could hit as high as $ 2 by April which would represent an approximately 25% increase from current prices.