Arbitrum price reclaimed $1.20 mark on May 25, up 25% within the weekly timeframe on news of Ethereum ETF approval: with new users trooping into the L2 ecosystem, ARB could witness more upside.
Arbitrum price surges 26% on Ethereum ETF Approval News
News of the Ethereum ETF approval has triggered a massive shuffle across the global cryptocurrency markets. Ethereum’s main rival proof of stake networks including mega-cap assets like Solana (SOL) and Cardano (ADA) have lost traction, while Ethereum-affiliated projects have received considerable boost since the SEC official verdict on May 23.
Notably, Ethereum Layer-2 networks have emerged one of the biggest gainers from the recent shift in crypto investors preferences in the aftermath of the ETH spot ETF approval.
Arbitrum is one of the largest Ethereum L2 networks, and recent price action is in keeping with the aforementioned narrative.
The chart above shows the Arbitrum price had initially surged 32% to hit a 40-day peak of $1.25 on news of the SEC’s approval verdict on May 23 before retracing to the $1.20 support level at the time of publication on May 25.
Notably, Arbitrum’s 25% upswing within the weekly time frame closely mirrors ETH price action, which also saw a 25% boost to reclaim the $3,700 territory.
As investors prepare for billions if institutional investment to flow in to the Ethereum ecosystem in the days ahead, this close price correlation to ETH suggests that ARB price could be poised for more upside in the days ahead.
100,000 New Investors Have Join Arbitrum Network This Week
Another vital catalyst behind ARB’s 25% price gains is the sheer number of new users that have trooped into the Arbitrum L2 network this week. Santiment chart below monitors the total number of individual wallets holding 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 within a given period.
According to the data presented in the chart above, 1.5 million individual wallets held ARB tokens at the start of the week on May 20. But at the time of writing on May 25, that figure has surged to 1.51 million ARB wallets.
This implies that 10,000 new users have joined the Arbitrum network this week. As these new users execute transactions the growing demand for ARB tokens could spur more price unswings.
And with Ethereum ETF inflows in sight, majority of the 1.51 million ARB investors will likely hold their assets, in anticipation of positive impacts of the inflow of funds into the Ethereum L2 ecosystem.
The resulting decline in sell-pressure and growing demand from new entrants could see Abritrum’s price make another leg-up towards the next major milestone at $1.50.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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