Why did the price of ARB fall?

Arbitrum (ARB) dropped 11.17% in the last 24 hours, falling more than the overall crypto market, which declined by 2.37%. Over the past week, ARB has lost 5.36%. Three main reasons explain this decline:

1. Token Unlocks: On January 16, 96 million ARB tokens (worth about $19.6 million) were released into circulation, increasing the supply.
2. Fee Revenue Lag: The Base network is generating much higher fees (70% of Ethereum Layer 2 fees) compared to Arbitrum’s $39,000 daily fees, raising concerns about Arbitrum’s growth.
3. Technical Breakdown: ARB’s price fell below important support levels, triggering automatic sell orders.

Deep Dive

1. Token Unlocks (Negative Impact)

On January 16, 96 million ARB tokens were unlocked from the DAO Treasury, adding more tokens to the market (source: CoinMarketCap). This is part of Arbitrum’s plan to gradually increase the number of tokens available.

When new tokens enter the market without matching demand, it puts downward pressure on the price. Early investors and team members often sell these unlocked tokens, especially when the market is weak. Historically, ARB’s price has dropped significantly after large token unlocks, such as a 35% drop after the March 2024 unlock.

2. Fee Revenue Lag (Negative Impact)

Data from January 14 shows that the Base network is generating $147,000 in daily fees, which is 70% of all Ethereum Layer 2 fees, while Arbitrum only brought in $39,000 (source: Wu Blockchain).

Fee revenue is an important indicator of how much users are engaging with a network. Arbitrum’s lower fee revenue compared to Base suggests that users and capital are moving to faster-growing Layer 2 networks, which could weaken Arbitrum’s future prospects.

Keep an eye on weekly fee trends on CryptoRank. If the gap between Base and Arbitrum continues, it could keep pressure on ARB’s price.

3. Technical Breakdown (Negative Impact)

ARB’s price recently fell below its 30-day simple moving average (SMA) of $0.2025 and its 7-day SMA of $0.21169. The Relative Strength Index (RSI) is at 49.27, showing weakening momentum.

In trading, breaking below these moving averages is seen as a bearish sign, often triggering automated sell orders. The trading volume surged by 80.78% to $182 million, indicating strong selling pressure.

Conclusion

The combination of increased token supply, competition from other Layer 2 networks, and negative technical signals has put significant pressure on ARB’s price. Despite this, Arbitrum’s network fundamentals remain solid, with over $3 billion in total value locked (TVL) and more than 2 billion transactions processed.

What to watch: Will ARB hold the $0.18 to $0.19 support level? Also, upcoming ecosystem grants, like $14 million in audit subsidies, could help restore investor confidence.

What could affect the price of ARB?

Arbitrum faces challenges from increased token supply and strong competition but shows promise through active governance efforts.

1. Token Unlocks – On January 16, 2026, 96 million ARB tokens (worth about $19.6 million) will become available, which could lead to more selling pressure in the short term.
2. Layer-2 Competition – Base currently controls 70% of Ethereum Layer-2 transaction fees ($147K vs. Arbitrum’s $39K as of January 14).
3. DAO Governance – Ongoing proposals, like rewards for network delegates, aim to boost community involvement and strengthen the network.

Deep Dive

1. Token Inflation & Unlocks (Potential Negative Impact)

Overview:
Arbitrum’s circulating supply has grown to 5.8 billion tokens, which is 58% of the maximum supply. The DAO can approve up to about 2% annual inflation. Recent token unlocks—releasing 11.6% of the supply to early investors and the team—have coincided with a 73% drop in ARB’s price this year.

What this means:
When new tokens enter the market without enough demand or token burning to balance it out, it can put downward pressure on the price. Past unlock events, like the one scheduled for January 2026, have been linked to price drops of 9-15% within a few days (CoinLive).

2. Layer-2 Market Share Shifts (Mixed Impact)

Overview:
Base has taken a large share of Ethereum Layer-2 fees, capturing 70% compared to Arbitrum’s 22% as of January 14. However, Arbitrum still leads in total value locked (TVL) with $2.5 billion and supports over 900 decentralized apps (dApps).

What this means:
Lower fee revenue for Arbitrum could reduce incentives for developers over time. Still, technical improvements like the Nitro upgrade and new projects joining the network (such as JasmyChain launching on January 17) may help Arbitrum stay competitive (CMC News).

3. Governance & Ecosystem Incentives (Positive Impact)

Overview:
Since 2023, Arbitrum’s DAO has approved over 60 proposals, including $14 million for security audits and $1.5 million per year to reward active delegates who participate in governance.

What this means:
Better security and higher community engagement—like the 78% approval for the ArbOS 40 upgrade—could attract more institutional investors. This aligns with past trends where increased TVL correlated with price gains (The Defiant).

Conclusion

Arbitrum’s future depends on managing token supply growth through governance tools like staking, while competing with strong Layer-2 rivals like Base. Keep an eye on the ARB/ETH ratio—if ARB consistently outperforms Ethereum, it would indicate a healthy ecosystem. The key question: can Arbitrum’s DAO shift focus from distributing tokens to creating lasting value before Base solidifies its lead?

What are people saying about ARB?

The Arbitrum community is weighing concerns about price against strong usage and liquidity trends. Here’s what’s happening:

1. Long-term holders focus on Arbitrum’s usefulness rather than price, seeing current levels as good buying opportunities.
2. Traders expect a bounce back to $0.25–$0.28 by February if key resistance levels are broken.
3. Large investors (“whales”) are using Arbitrum to earn yield, showing confidence in its decentralized finance (DeFi) system.
4. On-chain data reveals liquidity moving into ARB, suggesting institutional investors are accumulating.

Deep Dive

1. @CryptoAxtrol: Long-term utility vs. price weakness mixed

“Price is weak. Usage is strong. Builders are active. Arbitrum is a long-term network, not a short-term trade.”
– @CryptoAxtrol (13.2K followers · Jan 12, 2026, 7:21 PM UTC)
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What this means: This is a mixed signal for ARB. On one hand, Arbitrum shows strong on-chain activity with $3 billion in total value locked (TVL) and billions of transactions. On the other hand, price recovery depends on the overall market improving, with 2026 price targets between $0.17 and $0.41.

2. @bpaynews: $0.28 price target with caution mixed

“ARB shows bullish MACD momentum from $0.19 support, targeting $0.23–$0.40 recovery in 4–6 weeks despite neutral RSI signaling caution.”
– @bpaynews (2K followers · Jan 12, 2026, 8:53 AM UTC)
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What this means: This is mixed for ARB because technical indicators suggest there’s potential for price gains if the $0.19 support level holds. However, confirmation is needed through sustained trading volume above the $0.24 resistance level.

3. @Nazo_ku: Whale activity on Arbitrum neutral

“Whale supplied $18.7M in ETH on AAVE (Arbitrum) to earn 2.44% APY – signaling institutional-grade use cases beyond speculation.”
– @Nazo_ku (10K followers · Jan 9, 2026, 8:12 AM UTC)
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What this means: This is neutral for ARB. It shows that large investors are using Arbitrum for real financial activities like lending and earning interest, which is a positive sign. However, since these transactions use ETH for fees, it doesn’t directly increase demand for the ARB token.

4. @VPhm23380671: Liquidity rotation into ARB bullish

“Arbitrum keeps absorbing liquidity – money rotates toward ecosystems with real usage. This is where previous cycles started their move.”
– @VPhm23380671 (10.8K followers · Jan 15, 2026, 3:54 PM UTC)
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What this means: This is a bullish sign for ARB. There are steady inflows of liquidity, with over $699 million in bridge deposits. Also, the narrowing price gaps between altcoins and Bitcoin suggest accumulation, which often precedes upward price movement.

Conclusion

The outlook for ARB is mixed. Technical traders are watching for a recovery above $0.24, while fundamental data shows a gap between the current price ($0.19) and strong network usage (Arbitrum leads Layer 2 networks in TVL and transactions). Keep an eye on daily active addresses—currently around 267,000—as a key indicator of growing demand matching the network’s strength.

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What is the latest news about ARB?

Arbitrum is managing token unlocks and growing its ecosystem while staying a top player in Layer-2 blockchain solutions. Here’s the latest update:

1. Mainnet Launch (Jan 19, 2026) – JasmyChain goes live on Arbitrum Orbit, adding new use cases.
2. Token Unlock Event (Jan 16, 2026) – 96 million ARB tokens ($19.6 million) released, raising concerns about selling pressure.
3. Fee Revenue Update (Jan 14, 2026) – Arbitrum earns less in fees than Base but remains a key Layer-2 network.

In-Depth Look

1. JasmyChain Mainnet Launches on Arbitrum Orbit (January 19, 2026)

What happened:
JasmyChain, a Layer-2 blockchain compatible with Ethereum’s technology and focused on AI and Web3 applications, has moved to Arbitrum Orbit. It uses its own token, JASMY, to pay transaction fees, which ties network use directly to token demand. The chain offers predictable fees and benefits from Ethereum’s security through Arbitrum’s rollup technology.

Why it matters:
In the short term, this doesn’t significantly impact ARB token value but it diversifies Arbitrum’s ecosystem. Over time, more Orbit chains like JasmyChain could increase cross-chain activity and help Arbitrum become a key modular settlement layer in the blockchain space.
(Source: CoinMarketCap)

2. 96 Million ARB Tokens Released (January 16, 2026)

What happened:
Arbitrum’s DAO Treasury unlocked 96 million ARB tokens, worth about $19.6 million at $0.20 per token. This sudden increase in available tokens has caused concerns about potential selling pressure. ARB’s price dropped nearly 10% within 24 hours, trading around $0.19 as of January 19.

Why it matters:
This is generally negative for ARB’s price because releasing more tokens increases supply, which can lower value if demand doesn’t keep up. Since Arbitrum doesn’t have mechanisms to reduce supply, these unlocks could dilute existing holders unless new uses for ARB drive strong demand.
(Source: CoinMarketCap)

3. Layer-2 Fee Revenue: Base Leads, Arbitrum Holds Strong (January 14, 2026)

What happened:
Arbitrum earned about $39,000 in daily fees, while Base earned $147,000. Base now captures roughly 70% of all Ethereum Layer-2 fees. Despite this, Arbitrum remains the second most active Layer-2 network, ahead of Starknet, which earns about $9,000 daily.

Why it matters:
This is a neutral sign for ARB. Although Base is currently ahead in fee revenue, Arbitrum’s steady income shows it still has strong usage, especially in decentralized finance (DeFi) and institutional sectors. To close the gap, Arbitrum needs to speed up adoption of Orbit chains like JasmyChain.
(Source: CoinMarketCap)

Conclusion

Arbitrum is balancing growth through new projects like JasmyChain with challenges from token unlocks, all while competing with Base’s fee dominance. The key question is: Can ARB’s governance and the expansion of Orbit chains offset the downward pressure from increased token supply? Keep an eye on DAO treasury actions and developer activity for clues about Arbitrum’s future direction.

What is expected in the development of ARB?

Arbitrum is moving forward with several key projects planned for 2026:

1. Security Council Elections (Q1 2026) – A scheduled vote to refresh half of the council that oversees network security and emergency decisions.
2. Gaming Catalyst Program Launch (2026) – A $215 million fund to support game developers and boost blockchain gaming on Arbitrum.
3. Orbit Chain Expansion (2026) – Launching over 100 custom blockchains tailored for areas like decentralized finance (DeFi), real-world assets (RWAs), and artificial intelligence (AI).
4. Stylus Development (2026) – Introducing support for multiple programming languages to make smart contract development easier for more developers.

Deep Dive

1. Security Council Elections (Q1 2026)

Overview:
Every six months, Arbitrum’s decentralized autonomous organization (DAO) holds elections to renew its 12-member Security Council, which is split into two groups. The council plays a crucial role in managing emergency protocol actions and upgrades (Arbitrum DAO FAQs). The next election will replace one group in early 2026.

What this means:
This process helps keep governance decentralized and transparent. A smooth election can strengthen trust in Arbitrum’s security, while any delays or conflicts might raise concerns about how well the network is managed. Overall, this is neutral for ARB holders but important for long-term confidence.

2. Gaming Catalyst Program Rollout (2026)

Overview:
In December 2025, Arbitrum approved a $215 million fund to attract game studios and infrastructure projects to its platform. The program will provide grants focused on tools for player growth, software development kits (SDKs), and incentives to increase liquidity in gaming applications (@cryptojosh101).

What this means:
This is a positive development for ARB, as gaming has the potential to bring more users and increase transaction activity on the network. The success of this program depends on launching engaging games that keep players coming back.

3. Orbit Chain Expansion (2026)

Overview:
Arbitrum plans to launch over 100 new custom blockchains through its Orbit platform in 2026. These chains will be designed for specific applications, including DeFi, real-world assets, and AI. Priority projects include chains like Converge, which focuses on integrating traditional finance systems (Arbitrum Everywhere Campaign).

What this means:
If adoption of Orbit chains grows quickly, it could be very beneficial for ARB. The network could earn more from fees related to launching and operating these chains, and increased cross-chain activity could boost overall usage.

4. Stylus Development (2026)

Overview:
Stylus is a new development aimed at expanding smart contract programming beyond the current standard language, Solidity. It will add support for languages like Rust and C++, making it easier for developers from traditional software backgrounds to build on Arbitrum (CoinMarketCap).

What this means:
This could be a neutral to positive factor. By attracting more developers with diverse skills, Arbitrum could see a wider variety of decentralized applications (dApps). However, the impact depends on how well the new tools work and whether developers are motivated to switch or start building on Arbitrum.

Conclusion

Arbitrum’s 2026 plans focus on maintaining strong governance, growing its ecosystem, and expanding technical capabilities. The Gaming Catalyst Program and Orbit chain launches are major initiatives that could significantly increase user engagement and network activity. Meanwhile, Stylus aims to open the door for more developers to contribute. The key question will be how these efforts help Arbitrum scale effectively while competing with other Ethereum Layer 2 solutions.

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What updates are there in the ARB code base?

Arbitrum is making important updates to its technology, focusing on improving security and performance.

1. ArbOS 50 Dia Upgrade (December 2025) – This update aligns Arbitrum with Ethereum’s Fusaka upgrade, improves transaction efficiency, and adds new features.
2. $14M Audit Program (July 2025) – Funds security checks for projects on Arbitrum to make the network safer.
3. ArbOS 40 Callisto (May 2025) – Introduced easier ways for wallets to handle transactions and added support for advanced cryptography.

Deep Dive

1. ArbOS 50 Dia Upgrade (December 2025)

What’s new: This upgrade brings Arbitrum closer to Ethereum’s latest improvements, making the network faster and more reliable. Key changes include:

• Support for a new cryptographic curve (secp256r1) that enhances security.
• A limit on transaction gas (the fee for processing transactions) to prevent network slowdowns.
• Reduced costs for certain computations, helping developers save on fees.
• Fixed a bug that caused differences in how the system runs on different computer processors.

Why it matters: These changes help keep transaction fees stable and improve overall network performance, which benefits both users and developers.
(Source)

2. $14M Audit Program (July 2025)

What’s new: ArbitrumDAO allocated 30 million ARB tokens (about $14 million) to pay for security audits of projects building on Arbitrum. A committee reviews applications and approves trusted audit firms, focusing on new projects and major updates.

Why it matters: While this doesn’t change the technology directly, it helps reduce risks by making sure projects are secure. This encourages safer apps and attracts more users to the network.
(Source)

3. ArbOS 40 Callisto (May 2025)

What’s new: This upgrade allows wallets to pay transaction fees using any token and supports advanced signature methods, making transactions more flexible. It also improves access to historical data for apps that work across different blockchains.

Why it matters: These features make Arbitrum easier to use and more powerful for developers, helping grow applications in decentralized finance (DeFi) and digital identity.
(Source)

Conclusion

Arbitrum is steadily improving by syncing with Ethereum’s latest updates, boosting performance, and focusing on security. With these upgrades and support for audits, Arbitrum aims to stay competitive and reliable. How will these changes affect Arbitrum’s position compared to other Layer 2 solutions like Optimism?