Arbitrum Price Prediction as Network Hit By Partial Outage Amid Traffic Surge – Where Next for ARB?
Why Trust Cryptonews
ARB, the governance token for the Ethereum layer-2 scaling blockchain Arbitrum, is close to 5% lower on Friday, though is holding above its 21DMA at $1.10 despite news of a partial network outage.
The blockchain’s official X account tweeted that its sequencer staled at 10:29 ET due to a “significant surge in network traffic”, and that they are working to resolve the issue as quickly as possible.
The Arbitrum One Sequencer stalled at 10:29 AM ET during a significant surge in network traffic.
We are working to resolve as quickly as possible and will provide a post-mortem as soon as possible.
More details here: https://t.co/NBlzFuPFro
— Arbitrum (💙,🧡) (@arbitrum) December 15, 2023
The ARB token was relatively unmoved by the news.
Instead, ARB appears to be trading more in line with the broader crypto market, which has been trending lower on Friday amid hawkish commentary from a Fed policymaking official.
At current levels around $1.13, ARB is around 13% lower versus the multi-month highs it hit earlier in the week at $1.30.
ARB’s lack of reaction to the news of the partial outage could reflect 1) that investors remain confident that the Arbitrum development and maintenance team will soon have things fixed and running properly (indeed, they have a good track record) and 2) that the outage was caused by strong demand to use the network, which is arguably a good thing for ARB.
Since its launch in late March, the ARB token’s price has tracked the number of daily transactions on the network relatively closely, reaching its all-time high above $1.80 in mid-April, a time when daily transactions had recently surged too and was flirting with printing fresh all-time highs (as per Arbiscan).
Price Prediction – Where Next for Arbitrum (ARB)?
Chart analysis suggests that, if ARB is able to hold to the north of its major moving averages, which it is for now, then short-term price risks remain tilted to the upside and a retest of the summer highs in the mid-$1.30s remains a possibility.
Of course, fundamentals will have to also be bullish to support fresh upside and its unclear when network activity, which the above chart shows to have stagnated for much of 2023, will start picking up again.
But assuming that the broader crypto market is in the early stages of a new bull market and assuming that, like in past bull markets, rising prices in major cryptos continue to spur on-chain activity in altcoins as traders hunt for risk, Arbitrum’s network is more likely to experience renewed usage rather than continued decline.
