Arbitrum [ARB] Smashes Stablecoin Exodus with 16% Rally – $0.50 Target In Sight?

Defying gravity—and stablecoin outflows—Arbitrum’s ARB token rockets 16% as traders pile in. Is this Layer 2’s revenge against Ethereum’s gas fees?

The Bull Case:

ARB’s surge comes despite bleeding stablecoins—usually a death knell for altcoins. Either the market’s ignoring fundamentals (again), or whales know something we don’t.

The FUD Factor:

Remember when ‘stablecoin outflows’ meant impending doom? ARB just turned that playbook to ash. But keep an eye on those exchange reserves—nothing tanks a rally like sudden supply.

Price Watch:

$0.50 looms as the next psychological barrier. Break it, and ARB could retest its March highs. Fail, and well… at least the gas savings are real.

*Cynical take: Another day, another altcoin pumping while TradFi bankers argue about ‘store of value.’*

Key Takeaways 

• ARB surged 16%, crossing $2 billion market cap, amid strong spot and Futures inflows. Despite $39.7 million stablecoin outflows, bullish sentiment and rising volume suggest a potential rally toward $0.50.

Arbitrum [ARB] has led the market surge, according to CoinMarketCap, alongside other cryptocurrencies, following a 16% price jump, at press time, and a market capitalization back above $2 billion.

However, the rally is tied to some unusual dynamics, particularly the outflow of stablecoins. Yet, investor sentiment hasn’t changed—they continue buying.

AMBCrypto breaks down what this dynamic could mean for ARB’s rally and where the price might head next.

ARB sees major stablecoin outflows

Arbitrum recorded the highest stablecoin outflow among all chains in the past 24 hours, totaling $39.7 million, at press time, according to Artemis.

This suggests that investors may be shifting their preferred blockchain for trading stablecoin assets, resulting in a significant liquidity outflow.

Source: Artemis

Typically, this affects the utility of the ARB token, which facilitates many of these stablecoin transactions.

With reduced liquidity comes lower ARB usage, ultimately leading to lower demand and value for the token.

If this trend continues, it could impact ARB negatively in the long run, especially if demand falls. For now, however, demand remains high, increasing the likelihood that ARB will maintain its upward momentum.

Upswing remains likely, as liquidity inflow rises

Arbitrum’s rally still looks likely, supported by bullish sentiment in both spot and derivatives markets. 

Spot inflows have continued for two straight days, with the 11th of July marking the highest accumulation so far.

Source: CoinGlass

According to CoinGlass, spot investors purchased $1.08 million worth of ARB on the 10th of July and $2.29 million on the 11th of July, bringing the total to $3.37 million in purchases.

This bullish outlook is mirrored in the perpetual futures market, where the Open Interest Weighted Funding Rate remains positive. It currently sits at 0.0111%, its highest level since the 7th of June.

Source: CoinGlass

A positive reading on this metric indicates that there are more bullish derivative contracts than bearish ones at any given moment.

Similarly, Artemis reported a surge in Bridge Netflow, indicating a rise in on-chain purchases.

In the past 24 hours, investors purchased $14.3 million worth of ARB, reflecting strong buying activity at the time of writing.

With liquidity pouring in from both spot and derivative segments, ARB’s momentum is likely to remain strong, supporting a continued upswing.

Hurdle or clear path for ARB?

Analysis shows that ARB still holds strong rally potential, with the price possibly extending to $0.50 if momentum continues.

Currently, it has broken above a major resistance level at $0.415. However, ARB still risks a pullback even after breaching this level.

Source: TradingView

One key confirmation of continued bullish momentum WOULD be a candlestick close above that resistance level. Otherwise, a reversal could occur.

At press time, trading volume stood at $540.26 million, a 70% increase from the previous day. If this volume persists, ARB could see a significant price boost.