What’s going on with Polkadot as DOT craters 21% in 30 days
- So far, the year has seen a decline in Polkadot’s network activity.
- DOT’s price has dropped by double digits in the past 30 days.
The steady decline in user activity on the network signaled a drop in demand for the chain since the year began.
Due to this and the general market correction witnessed post-ETF approval, DOT’s value dropped by 21% over the last month, data from CoinMarketCap showed.
A drop in network activity
According to data from The Block, Polkadot’s daily transaction count, measured using a seven-day moving average, has trended downward since the 1st of January.
On the 27th of January, the network closed the day with a transaction count of 12,000, marking a whopping 60% decline from the 30,000 transactions the chain recorded on New Year’s Day.
The drop in daily transaction count on Polkadot has been due to the steady decrease in the number of unique addresses active on the network daily, either as a sender or receiver.
On-chain data showed that on a year-to-date (YTD), this has fallen by 56%.
Regarding new demand for the chain, the number of unique addresses that appeared for the first time in a transaction on Polkadot climbed to a two-year high on the 26th of December 2023.
However, this was immediately followed by a decline. The daily count of new addresses on the Polkadot blockchain has since plummeted by 75%. On a YTD, this has decreased by 44%.
As a result of low user activity on the chain in the last month, Polkadot’s fees and the revenue from the same have been significantly impacted.
According to data from Token Terminal, transaction fees on the network in the last month amounted to $71,000, dropping by 97%.
Similarly, the revenue generated from these fees stood at $56,480, also witnessing a corresponding 97% decrease.
AMBCrypto’s assessment of DOT’s daily chart showed a steady decline in its On-Balance-Volume (OBV) since the year began.
As of this writing, the altcoin’s OBV returned a value of 60.98 million, logging a 28% decline from the 85 million recorded on the 1st of January.
Read Polkadot’s [DOT] Price Prediction 2023-24
Confirming the high selling pressure, DOT’s Chaikin Money Flow (CMF) rested on the zero line and was poised to breach the same at the time of writing.
A CMF value below zero is taken as a sign of weakness in the market, as it signals increased liquidity exit.