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Reading: Arbitrum Leads L2 TVL Yet ARB Token Price Declines – Why?
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Kriptoteka > Market > DEX > Arbitrum Leads L2 TVL Yet ARB Token Price Declines – Why?
DEX

Arbitrum Leads L2 TVL Yet ARB Token Price Declines – Why?

marcel.mihalic@gmail.com
Last updated: September 13, 2024 10:13 pm
By marcel.mihalic@gmail.com 4 Min Read
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  • Arbitrum ranks third in DEX volume at the time of reporting.
  • ARB has been on a downward trajectory for the past three months.

Arbitrum [ARB] remains a leading decentralized exchange (DEX) platform and holds the highest Layer 2 (L2) Total Value Locked (TVL) in the sector.

Despite its strong TVL performance and leadership in the DeFi realm, the native token ARB has shown a less optimistic trend over the last few months.

Recent data suggests that nearly all ARB holders are currently facing losses, underscoring the token’s price decline.

Arbitrum’s ongoing downtrend

AMBCrypto’s review of Arbitrum on a daily chart indicates low trading activity in recent months, coupled with a consistent decline in its price.

The short and long moving averages (represented by yellow and blue lines) also serve as trend indicators, demonstrating that ARB’s price has been on a downtrend since May.

Arbitrum price trendArbitrum price trend

Source: TradingView

As of this writing, ARB is trading around $0.51, marking a decline of more than 1% in the ongoing session.

The MACD (Moving Average Convergence Divergence) analysis reinforces a bearish sentiment, with signal lines positioned below zero.

The harsh reality of this downtrend is highlighted by the fact that nearly all ARB holders are currently underwater.

Increasing number of ARB holders out of the money

The Global In/Out of the Money chart on IntoTheBlock illustrates the profound effects of Arbitrum’s price slump on its holders.

Currently, around 1.19 million addresses are out of the money, indicating that over 94% of ARB holders are incurring losses.

Only about 2% of holders are in profit, representing one of the lowest profitability rates in the token’s history.

Despite these challenging price conditions, network activity on Arbitrum has remained strong.

As per data from IntoTheBlock, Arbitrum secured its place as the third-highest decentralized exchange (DEX) by trading volume, claiming over 14% of the market share, just behind Ethereum [ETH] and Solana [SOL].

This combination of high holder losses and robust network fundamentals creates an interesting scenario.

It suggests that while the platform’s utility remains strong, the market’s perception of ARB may be swayed more by speculation.

Arbitrum retains significant L2 market share

According to AMBCrypto’s examination of Arbitrum’s position in the Layer 2 (L2) space, the platform holds a commanding presence.

Data from L2 Beats shows that Arbitrum commands over 39% of the L2 Total Value Locked (TVL), with more than $13 billion secured in the network.


Is your portfolio in the green? Check out the ARB Profit Calculator


Nonetheless, despite its impressive metrics in network utilization and dominance within the L2 domain, ARB’s price does not reflect these positive trends.

The platform’s strong activity has failed to convert into a favorable price trajectory for the ARB token, which continues to grapple with stagnant price movements and a significant number of holders facing losses.

Next: Here’s why TRON holders are ‘237% confident’ in TRX’s price action

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