- Base network’s DeFi TVL is currently at an all-time high.
- A competitive shift has seen Arbitrum continue to lose its market share to Base.
Base, an Ethereum [ETH]-based layer 2 network, has emerged as a formidable rival to Arbitrum [ARB] amid significant growth in its decentralized finance (DeFi) Total Value Locked (TVL).
Base network’s TVL stood at an all-time high of $1.96 billion, at press time per DeFiLlama. This metric has surged by around 37% in the last two weeks.
In comparison, Arbitrum’s TVL has not registered any significant gains within the same period.
Source: DeFiLlama
As seen on DeFiLlama, Arbitrum remains the largest Ethereum layer 2 in the DeFi space with a TVL of $2.54 billion. However, Base network’s rapid growth suggests that it could soon flip Arbitrum.
Base network sees massive growth
Data from Artemis shows that in the last three months, the daily active addresses on Base have surged from around 507,000 to more than 1.2 million. At the same time, the daily active addresses on Arbitrum have dropped from 789,000 to around 466,000.
Base is also dominating in the daily transaction count as the daily transactions on the network are currently two times more than the transactions on Arbitrum.
Source: Artemis
The rise in daily transactions and addresses on Base amid a drop in the same metrics on Arbitrum suggests a competitive shift where Base is gaining traction whereas Arbitrum is losing ground.
Increased activity on Base is further seen in a rise in stablecoin supply. According to Token Terminal, USD Coin (USDC) supply on Base has increased by $300 million since the start of the month.
Source: TokenTerminal
On a year-to-date basis, USDC supply on Base has increased by nearly 70 times from below $50 million on 1st January to $3.35 billion. These metrics point towards increased activity and liquidity on the Base network.
As Base eats into Arbitrum’s market share, will ARB break out to $0.82 after confirming a bullish pattern?
ARB price outlook
ARB price has confirmed a double-bottom pattern, which suggests that a bullish reversal is likely. However, the altcoin faces strong resistance at the neckline after failing to break above $0.62 in the last four days.
Source: Tradingview
For ARB to break out and rally to the next target price of $0.82, high buying volumes are needed. However, a look at the volume histogram bars shows that selling pressure is higher than buying pressure.
The Relative Strength Index (RSI) line has also stagnated after a sharp move north suggesting that buying momentum is weakening. Nevertheless, the RSI at 64 is still in bullish territory.
Realistic or not, here’s ARB’s market cap in OP’s terms
If buyers remain hesitant, ARB might continue to consolidate at the neckline, which is the $0.61-$0.62 price level, before making a decisive move. A failed breakout above the neckline could see the price slip to the support level at $0.47.
The layer 2 industry continues to garner attention across the industry per Kaito AI. This industry ranked fourth in top crypto narratives this year, which could see L2 tokens like ARB attract interest.
(Source: X)