ARB price to $2? Ethereum L2 rival Arbitrum will double in April, fractal suggests

The price of Arbitrum ($ARB) has dropped by nearly 20% a week after establishing its record high at $1.60 on March 23. However, the Ethereum layer-2 token looks set to resume its uptrend in the coming weeks.

Polygon price fractal

The cues for a bullish Arbitrum token could be traced back to its Ethereum L2 rival Polygon's market debut.

MATIC started trading on Binance on April 26, 2019, at $0.0026 per token. MATIC/USD rallied nearly 300% to reach $0.0105 on the same day before wiping out 70% of those gains in a market correction by May 9, 2019.

It regained its upside momentum afterward, rallying by nearly 1,350% to $0.045 on May 21, 2019.

MATIC/$USDT four-hour price chart. Source: TradingView/Mac

The price trajectory reflects a recurring phenomenon involving the launch of digital tokens with seemingly strong fundamental backing, according to independent market analyst Mac.

For instance, Solana ($SOL), a layer-1 blockchain, rallied 50,000% before undergoing a similar pump, correction, and sideways consolidation phase after its exchange debut in April 2020.

$SOL/USD daily price chart. Source: TradingView/Mac

Arbitrum price could hit $2 by April

From a fundamental perspective, Arbitrum has emerged as a strong contender in the Ethereum L2 space in recent months, with several leading DeFi protocols, including $GMX, Uniswap, Sushi, and Aave, among its users.

$GMX and Radiant on Arbitrum are two of the fastest-growing protocols in terms of both fundamentals and price appreciation this year, noted Dustin Teander, a researcher at analytics firm Messari, adding:

Looking at user retention metrics, it’s apparent these protocols have gained above-market traction compared to imported protocols like Uniswap or Aave.

Optimism vs. Arbitrum monthly user retention rates. Source: Messari

As of March 29, the total value locked (TVL) across Arbitrum pools rose to $2.2 billion versus around $981 million three months ago, according to data resource Defi Llama.

Related: Arbitrum airdrop sells off at listing, but traders remain bullish on $ARB

Mac noted that Arbitrum's strong fundamentals could limit $ARB's downside prospects and prompt traders to re-accumulate the token in the coming weeks.

$ARB/$USDT hourly price chart. Source: TradingView/Mac

That may lead to another price run-up, eyeing $2 by April 2023. as illustrated below.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.