As a researcher, I find the current state of Polkadot concerning. The network’s transaction volume and user activity have seen a significant decline this month, with both the Relay Chain and parachains experiencing a sharp reduction in economic throughput. This trend is reflected in the low demand for Polkadot’s DOT coin, as evidenced by the decrease in new addresses and unique active addresses on the network.
I’ve observed that the monthly transaction volume on Polkadot’s Relay Chain and parachains is projected to reach its smallest figure this year-to-date in April, based on data provided by The Block.
As a Polkadot network analyst, I would describe the Relay Chain as the core component of the Polkadot ecosystem, responsible for managing the coordination and ensuring the security of the entire network. Parachains, on the other hand, are independent blockchains that operate in parallel with the Relay Chain and maintain connections to it.
This month, the network has processed a grand total of $400 million in transactions, marking a significant decrease of 56% compared to the $916 million transacted in March. On the other hand, Polkadot experienced a drastic drop of approximately 90% in its monthly transaction volume, falling from a peak of $4 billion at the end of January.
Polkadot witnesses user drought
The reduced economic output on Polkadot Relay Chain and its parachains in April can be attributed to the low level of user engagement on the network during that time.
Based on information from The Block, there has been a significant decrease of approximately 43% over the past 25 days in the number of distinct Ethereum network addresses participating as senders or receivers in transactions on the Relay Chain.
Likewise, new user demand for the Polkadot Relay Chain has plummeted.
Thus far in this month, approximately 44,000 distinct addresses have emerged on the network for the first time. This is a significant decrease of nearly 60% compared to the approximately 112,000 new demands for the Layer-0 blockchain observed in March.
Through its various parachains, user activity has decreased in tandem during the past month. As reported by The Block, the number of monthly active addresses reached a Year-to-Date peak of 6 million at the end of March.
I’ve noticed that the network activity on Polkadot’s parachains has decreased noticeably over the past month. Specifically, there have been approximately 2.2 million active addresses within this timeframe.
Additionally, there has been a significant decrease in the number of new demands for these parachains recently. Specifically, over the past 25 days, approximately 101,000 new addresses have joined these networks. In contrast, back in March, around 1.52 million new addresses were recorded.
Look before you leap
As a MACD analyst, I’ve noticed a revival of bullish sentiment based on recent readings from the indicator. However, it’s important to highlight that the demand for this altcoin has yet to pick up significantly.
Read Polkadot’s [DOT] Price Prediction 2024-25
At present, the crucial trend indicators for the coin are situated beneath their averages, implying that traders have been more inclined towards selling rather than buying.
Its Relative Strength Index (RSI) was 38.72, while its Money Flow Index (MFI) was 37.20.
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2024-04-26 07:23