- Arbitrum and Optimism saw more transactions in the new year.
- ARB and OP were trending down at press time.
Arbitrum [ARB] and Optimism [OP]two prominent layer 2 scaling solutions for Ethereum [ETH]have experienced increased transaction activity this year, according to available data.
Despite this positive trend in transaction volume, both networks have seen a drop in Total Value Blocked (TVL) in recent days. Furthermore, the value of their native tokens has also declined.
Arbitrum and Optimism see increased transactions
According to a recent analysis by IntoTheBlock, transaction volume on major Ethereum Layer 2 solutions such as Arbitrum and Optimism has quadrupled over the past year.
This increase in activity was particularly pronounced in the second quarter, following the integration of Ethereum Improvement Proposal (EIP) 4844.
EIP-4844 is designed to increase the scalability of Ethereum by introducing a new type of transaction that handles data more efficiently, contributing to lower fees and higher throughput.
Further analysis by Growthepie showed that between the two, Arbitrum has experienced more significant growth since the start of the new year.
Prior to this period of rapid growth, ARB transactions were below 1 million.
However, after March, the number of transactions on ARB escalated significantly, reaching over 1 million and peaking at approximately 2.6 million transactions on June 26.
In comparison, OP showed a surge in early April, with transactions surpassing 800,000, but has since seen a marked decline.
So far, ARB has maintained a high level of activity with over 1.5 million transactions, while Optimism’s transaction count has dropped to over 409,000.
TVL in Arbitrum and Optimism falls
Total closed value (TVL) in layer 2 solutions such as Arbitrum and Optimism, as reported by DeFiLlama, showed a pattern of initial increases followed by subsequent declines.
This trend is particularly evident with Arbitrum, which saw its TVL grow to over $3.1 billion in March. This growth reflected a period of significant adoption and investment in the platform.
However, since then, there has been a noticeable decline in TVL, with the latest figures showing it was around $2.7 billion.
Similarly, Optimism also experienced an upward trend in TVL, crossing the $1 billion mark in March. However, like ARB, it has seen a decrease in TVL, with its current value around $665 million.
These declines in TVL for both Arbitrum and Optimism can be attributed to several factors, including changes in investor sentiment, broader market conditions affecting the entire crypto ecosystem, or specific events within the Layer 2 networks.
ARB and OP receive strong resistance
The price trends for both ARB and OP have been on a downward trajectory, as detailed in AMBCrypto’s analysis.
Over the past few weeks, OP has been increasing its distance from its short-term moving average, which is currently around $2.2.
This distance shows that the $2.2 level is acting as a strong resistance point, implying that breaking this price barrier is becoming increasingly challenging.
As of this writing, OP was trading at around $1.7, showing a modest increase of less than 1%.
Source: TradingView
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Similarly, ARB has also moved further away from its short-term moving average, strengthening the resistance level around $1. As of this writing, ARB was trading at around $0.7, a slight increase of less than 1%.
Source: TradingView
The increasing distance from resistance levels for both cues suggests a strengthening of bearish sentiment, indicating that investors may be less optimistic about immediate upward price moves.