Arbitrum, a Layer 2 scaling solution for Ethereum, has recently witnessed a surge in network activity, surpassing its competitor Optimism. Interestingly, even amid this increased activity, Arbitrum’s price has seen a decrease over the past 24 hours. A deeper examination of Arbitrum’s metrics reveals a complex picture of its current performance and potential.
Arbitrum’s Rising Network Activity
Recent data from Nansen indicates that Arbitrum’s daily transaction count has consistently been between 600,000 and 900,000. This is in contrast to Optimism’s transaction count, which ranges from 300,000 to 400,000, suggesting Arbitrum’s user activity is nearly double that of its rival. Artemis’ graphics corroborate this trend, showing a dip in daily active addresses on February 9 followed by a recovery. However, when zoomed out to a 30-day period, there’s a noticeable dip in Arbitrum’s daily transaction numbers.
Financial Indicators and ARB’s Price Dilemma
Despite a downturn in transactions over a month, the network’s financial indicators such as fees and revenues are on an uptick. This conflicting scenario is seen as a positive sign of network health by enthusiasts. On the valuation front, Nansen’s insights reveal that Arbitrum is approximately half as valuable as Optimism in terms of P/S and P/F ratios, signaling that the token could be undervalued.
In the price context, Arbitrum’s token has depreciated by 3% within the last day, trading at $1.94. The drop aligns with Bitcoin‘s fall below $51,000. Concurrently, Arbitrum’s market capitalization has decreased by over 2% to $2.4 billion, and the trading volume has plummeted by more than 35% to $268 million.
While the increase in on-chain activity could indicate growing adoption and positive sentiment towards the Arbitrum network, the decline in token price and market value suggests that investor confidence might be swayed by broader market trends, including the performance of major cryptocurrencies like Bitcoin.