Arbitrum (CRYPTO:ARB) has recently dropped to an all-time low of $0.57 on July 5, marking a significant downturn exacerbated by a sharp decline in user engagement.

Since June 21, both daily active addresses and transaction volumes on the Layer 2 network have plummeted by over 46% and 34%, respectively.

Despite a subsequent 22% price increase, sustained low user activity poses challenges to ARB's price stability and recovery prospects.

Analysts, including Santiment's Brian Quinliven, note a cautious stance among whales, who may be anticipating more favorable market conditions before making significant moves with their holdings.

Looking ahead, ARB's future hinges on restoring investor confidence and increasing network activity to support potential price rebounds.