ARB has surged by over 50% this week on the back of ETH’s push towards $5k. However, it now faces a key test as a major token unlock looms.

Arbitrum [ARB] has ripped by over 50% this week. All while reclaiming the $0.50-zone and pushing it back towards Q1’s highs.

However, after hitting $0.58 on 13 August, ARB retraced by about 8%. This marked a typical short-term reset as early holders locked in profits. 

Meanwhile, with Ethereum [ETH] pushing towards $5k, Layer‑2 momentum has been heating up. In fact, ARB’s TVL is now close to an all-time high of $3.4 billion, highlighting strong capital inflows and smart contract usage.

Additionally, the 15% intraday spike in the ARB/ETH ratio formed the longest green candlestick in nearly three months. This hinted at relative outperformance versus Ethereum.

Put simply, ARB is re-rating as a leveraged play on the back of ETH’s bullish momentum and benefiting from ETH-denominated liquidity flows into the Layer‑2 ecosystem.

Looking ahead, ARB’s price predictions for the remainder of 2025 vary. Some forecasts suggest a potential decline to $0.42. However, the average price for the year is projected to be around $0.49.

Arbitrum is heating up ahead of its token unlock on 16 August. About 92.65 million ARB, roughly 1.8% of the circulating supply, worth $42.85 million will hit the market.

Despite potential sell pressure, however, ARB surged by 15.7% to $0.56 on 14 August. It was backed by strong volume and bullish on-chain signals – A sign of robust market demand and institutional interest.

In short, the unlock could spike short-term volatility, with heavy selling dragging the price action lower. However, staking uptake or long-term holder absorption could keep the downside in check.

ARB’s next move will largely ride on ETH’s momentum, how much heat stays in the Layer-2 trade, and whether the market can soak up the fresh supply from the unlock.

If demand holds and on-chain activity keeps humming, Arbitrum could keep building on its re-rating trend.