Ethereum Network Upgrade and Rise in Active Arbitrum Users Could Trigger ARB Price Reversal

Positive developments in the Ethereum and Arbitrum networks and possible improvement in crypto investor sentiment could give ARB price a boost.

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While the Arbitrum ARB governance token has seen a steady decline since airdropping in late March, its ecosystem is showing healthy growth.

A recent Nansen report shows that Arbitrum activity improved after the airdrop, stabilizing "at a higher level" than before the airdrop. Daily active users, gas charges, and transaction counts have maintained consistently higher levels since April 2023.

The gap between the number of active users on Arbitrum and Optimism widened after the Aribtrum airdrop, approaching Ethereum.

Daily active users of Arbitrum, Ethereum and Optimism (last 6 months). Source: Nansen

Trading volume on Arbitrum-based decentralized exchanges paints a similar picture, showing an obvious increase in volume after the airdrop.

The DEX trading volume on Arbitrum. Source: DefiLlama

Additionally, Nansen's report shows that ARB airdrop recipients only accounted for about 5% of activity on the blockchain and that Arbitrum attracted significantly more new users after the airdrop.

Potential catalysts for rising ARB

Additionally, an upcoming update on Ethereum in the second half of 2023, dubbed Cancun-Deneb (Dencun),