As per analysts, Arbitrum [ARB] is currently perceived as undervalued and could potentially witness a significant 125% increase if it reaches its previous highs from 2024.
In a recent analysis, Andrew Kang from crypto VC Mechanism Capital pointed out that ARB is fundamentally undervalued when compared to other alternative cryptocurrencies.
“Despite experiencing a substantial rally, $ARB remains fundamentally undervalued. It is trading at a fraction of Sui, AVAX, Tron, and other similar coins, yet it surpasses them in terms of trading volume and Total Value Locked (TVL) by a significant margin.”
Key Factors Influencing ARB
Moreover, Kang highlighted that the altcoin has garnered considerable institutional interest and has been actively involved in Ethereum’s interoperability research. These factors are perceived as positive catalysts driving the price of ARB higher.
Additionally, Ryan Connor from Blockworks Research emphasized the significance of Arbitrum’s Timeboost, a novel priority system for transaction ordering, as another pivotal catalyst. The research firm indicated that the introduction of Timeboost is expected to stimulate more activity on Arbitrum, rectifying the market’s undervaluation of ARB.
What lies ahead in terms of ARB’s price potential?
Based on weekly charts, the medium-term target could be the upper price channel at $1.9, representing an 80% potential increase upon attainment. Further progress to reach its peak of $2.4 in 2024 could amplify the potential surge to 127%.
These estimates present a conservative price projection. In the scenario of a breakout from the descending channel aligning with typical patterns, the optimistic target could surge to $3.35. This projection suggests a substantial 213% rise from its current value of $1, presenting a possible 3x leap.
Currently, ARB is encountering a significant hurdle around the median level of the channel. A definitive breakthrough above $1.2 could expedite the likelihood of reaching the upper channel and triggering a potential breakout.
ETH’s price trend and regulatory alterations may have a lasting impact in the long term. The ETH Layer 2 sector has lagged behind due to regulatory uncertainties surrounding DeFi. Anticipated shifts under the upcoming administration might change this scenario.
The recent appointment of pro-crypto Paul Atkins as SEC Chair prompted expectations of ETH touching $4k. This development saw ARB surging, affirming the correlation between ETH’s influence on ARB and the overall Layer 2 segment.
The Interplay Between ETH and ARB
How might the future price trajectory of ETH benefit ARB? Numerous analysts anticipate ETH reaching a new all-time high by January 2025. QCP Capital indicated in its latest market assessment that historically, ETH tends to hit an ATH in January after halving events.
In essence, a robust momentum for ETH starting in January 2025 could propel ARB to new heights.
Interestingly, the movements observed in major whale wallets also foresaw additional gains for ARB. From September onwards, significant whale accounts have escalated their ARB holdings from 6 billion to 7.15 billion tokens, approximately valued at $7.15 billion.
Collectively, these assessments indicate a bullish outlook for ARB, potentially yielding over 200% gains by January 2025.
Nonetheless, the trajectory of ARB could be influenced by developments in ETH. Any negative sentiment surrounding the dominant altcoin could impact the optimistic projections for ARB.
Disclaimer: The views presented are personal opinions and do not serve as financial, investment, or trading advice.