Ethereum
Arbitrage Price Rises 26% as Ethereum ETF Elevates L2 Sector
Arbitrage price reclaimed the $1.20 mark on May 25, up 25% on the weekly time frame following news of Ethereum ETF approval: with new users joining in the L2 ecosystem, ARB could see more upside.
Arbitrage Price Rises 26% Following Ethereum ETF Approval News
News of the approval of the Ethereum ETF has sparked a massive shake-up in global cryptocurrency markets. Ethereum’s major rival proof-of-stake networks, including mega-cap assets like Solana (SOL) and Cardano (ADA), have lost ground, while Ethereum-affiliated projects have received considerable momentum since the official SEC verdict of May 23.
Notably, Ethereum Layer-2 networks have become one of the biggest winners from the recent shift in crypto investor preferences following the approval of the ETH spot ETF.
Arbitrum is one of the largest Ethereum L2 networks, and recent price action is consistent with the aforementioned narrative.
The chart above shows that Arbitrum price initially jumped 32% to a 40-day high of $1.25 upon the announcement of the SEC approval verdict on May 23, before falling back at the $1.20 support level at press time on May 25.
Notably, Arbitrum’s 25% surge in the weekly timeframe closely mirrors the price action of ETH, which also saw a 25% surge to reclaim the $3,700 territory.
As investors prepare for billions in institutional investment to flow into the Ethereum ecosystem in the coming days, this close price correlation with ETH suggests that ARB price could be poised for more increase in the days to come.
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100,000 new investors joined Arbitrum Network this week
Another key catalyst behind ARB’s 25% price gains is the large number of new users who joined the Arbitrum L2 network this week. The Santiment chart below monitors the total number of individual wallets containing non-zero units of ARB tokens.
This chart provides real-time insights into a blockchain network, new user acquisition, or the rate at which the number of investors within the ecosystem has grown over a given period.
According to the data shown in the chart above, 1.5 million individual wallets held ARB tokens at the start of the week of May 20. But as of this writing on May 25, that figure has risen to 1.51 million ARB wallets.
This implies that 10,000 new users joined the Arbitrum network this week. As these new users execute trades, the growing demand for ARB tokens could lead to more price drops.
And with Ethereum ETF inflows in sight, the majority of ARB’s 1.51 million investors will likely hold on to their assets, in anticipation of the positive impacts of the influx of funds into the Ethereum L2 ecosystem.
The resulting reduction in selling pressure and increasing demand from new entrants could allow Abritrum price to advance further towards the next major milestone at $1.50.
Disclaimer: This content is informational and should not be considered financial advice. The opinions expressed in this article may include the personal opinions of the author and do not reflect the opinions of The Crypto Basic. Readers are encouraged to conduct thorough research before making any investment decisions. Crypto Basic is not responsible for any financial losses.
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