Arbitrum [ARB] has solidified its position as a leading decentralized exchange (DEX) platform, boasting the highest Total Value Locked (TVL) on Layer 2 (L2) in the ecosystem.
While the platform excels in TVL and holds a prominent position in the DeFi sector, its native token, ARB, has been experiencing a lackluster performance in recent months.
Current data indicates that nearly all ARB holders are facing losses, reflecting the token’s declining value.
Arbitrum’s Persistent Decline
An analysis of Arbitrum’s daily chart by CryptoCrypto revealed subdued trading activity and a consistent downward trajectory in price over the last few months.
Both short and long-moving averages (represented by yellow and blue lines) confirm a downtrend in ARB’s price since May.
At the time of writing, ARB was valued at around $0.51, showing a more than 1% decline in the current session.
The MACD (Moving Average Convergence Divergence) indicator adds weight to the bearish sentiment, with signal lines positioned below zero.
This downward trend becomes noticeable as virtually all ARB holders find themselves in negative territory.
Increasing Number of ARB Holders in Loss
IntoTheBlock’s Global In/Out of the Money chart highlights the significant impact of Arbitrum’s price drop on its holders.
Presently, over 94% of ARB holders, accounting for about 1.19 million addresses, are witnessing losses.
Only a small fraction of holders, approximately 2%, are in profit, marking one of the token’s lowest profit levels historically.
Despite the challenging price scenario, Arbitrum continues to display robust network activity.
According to data from IntoTheBlock, Arbitrum stands as the third-ranked DEX platform by volume, securing more than 14% market share, behind Ethereum [ETH] and Solana [SOL].
The juxtaposition of a high percentage of holders at a loss with Arbitrum’s strong network fundamentals presents an interesting conundrum.
It suggests that market sentiment towards ARB may be fueled more by speculative elements despite the platform’s ongoing utility.
Arbitrum’s Commanding Position in L2
As per CryptoCrypto’s examination of Arbitrum’s dominance in the Layer 2 (L2) realm, the platform continues to hold sway.
Data from L2 Beats indicates that Arbitrum controls more than 39% of the L2 Total Value Locked (TVL), with over $13 billion securely held in the ecosystem.
Nevertheless, despite this impressive network usage and dominant role in the L2 sector, ARB’s price has failed to reflect these positive metrics.
The platform’s active network engagement has not translated into a bullish trend for the ARB token, which grapples with sluggish price movements and a significant number of holders facing losses.