Polkadot’s DOT Value and Network Activity Plunge in 2024
What’s happening with Polkadot? DOT loses 21% in 30 days
In 2024, Polkadot’s network activity experienced a significant decline. The price of DOT, Polkadot’s cryptocurrency, has fallen by double-digit percentages in the last 30 days. According to the dashboard of The Block Data, network activity on the Polkadot blockchain has suffered a significant slump and reached its lowest level so far this year.
Decrease in Network Activity
Data from The Block show that the daily transaction count of Polkadot, measured on a seven-day average, has decreased since January 1st. On January 27th, the network ended the day with a transaction count of 12,000, a staggering decrease of 60% compared to the 30,000 transactions recorded by the chain on New Year’s Day.
The decrease in daily transaction count on Polkadot is due to the steady decrease in the number of unique addresses that are active in the network daily, either as senders or receivers. On-chain data shows that this has fallen by 56% year to date (YTD).
New Demand and Network Revenues
The number of unique addresses that appeared for the first time in a transaction on Polkadot reached a two-year high on December 26, 2023. However, this peak was immediately followed by a decline. The daily count of new addresses on the Polkadot blockchain has since fallen by 75%. Year to date, it has fallen by 44%.
Due to the low user activity on the chain in the last month, Polkadot’s fees and the resulting revenues have been significantly affected. According to data from Token Terminal, the transaction fees in the network last month amounted to $71,000, a decrease of 97%. Likewise, the revenue generated from these fees fell to $56,480, also a decrease of 97%.
AMBCrypto’s valuation of the daily DOT chart showed a steady decline in its On-Balance Volume (OBV) since the beginning of the year. At the time of writing this article, the altcoin’s OBV was 60.98 million, a decrease of 28% compared to the 85 million recorded on January 1st.
The high selling pressure confirmation, DOT’s Chaikin Money Flow (CMF), was on the zero line and was about to break through it at the time of writing. A CMF value below zero is seen as a sign of weakness in the market as it signals an increased outflow of liquidity.
Sources: The Block, Token Terminal, AMBCrypto.