- Arbiturm saw a high correlation between ARB and user growth on the protocol.
- Activity on the Arbitrum protocol decreased.
arbitration [ARB] saw a huge surge in activity in recent months. Despite its ability to farm, Arbitrum has successfully carved out a distinct niche within the DeFi landscape, particularly gaining significant traction over perpetual platforms like GMX_IO.
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Even after the hype surrounding its AirDrop token died down, overall activity on the network remained consistent. This wave of activity contributed positively to the token’s health.
According to Messari’s data, ARB’s market cap appeared to be directly related to the growing number of users on the platform.
Source: Messari
Arbitrum: What’s Going Up…
However, activity on Arbitrum has steadily declined in recent weeks. The number of daily active addresses on the Arbitrum network fell from 600,000 to less than 200,000 last month. Subsequently, the number of daily transactions on the protocol also decreased.
Source: Artemis
If the correlation between the token and the protocol remains this high, it could negatively impact ARB in the future.
At the time of writing, ARB was trading at $1,638. The price has dropped significantly by 14.56% since May 6. The Bollinger bands were relatively narrow, suggesting that ARB would not experience much volatility. The price was trading below the midline, which represents the moving average. This suggested that the sellers were currently in control of ARB’s price.
Realistic or not, here is ARB’s market cap in terms of BTC
The RSI was at 48.99 at press time, suggesting a more neutral outlook. The CMF fell to -0.03, indicating a net outflow of money from ARB.
Source: Trade View
Other factors involved
Coupled with these factors, the ARB token’s velocity dropped significantly over the past month. This suggested that the frequency with which ARB was traded had dropped. In terms of network growth, no improvement was observed.
Source: Sentiment