Polkadot’s address activity increases when the market situation gets better.
Demand from DOT is uncertain as the market looks for more direction.
Like the majority of the main blockchain networks, Polkadot has a strong operating start so far this year. But without a point of comparison, it is impossible to know what to anticipate with any real certainty.
Polkadot’s daily active accounts increased by 64% in Q4 22 and the number of new accounts increased by 49%, according to the Messari study.
This is significant since the market’s bottom range was hit in the same quarter that the FTX black swan incident occurred.
On the basis of the information from the Messari research, it is simple to estimate that Polkadot user activity will likely expand at a faster rate in Q1 2023.
Although it’s possible that the market recovery may lead to increased user growth, it’s not certain. The same data suggests that users leaving FTX may have been a major contributor to Polkadot’s user growth.
However, a robust rebound in Q1 may potentially support increased user engagement and growth. This big increase in users is a reflection of the December surge in social media activity.
The demand for DOT did increase significantly as was seen in January as a result of the robust address activity.
Can DOT keep the momentum going?
The performance of DOT so far in February suggests a decline in demand and substantial sell pressure.
After investors were duped by FUD, it retraced by almost 13% to its press time price of $6.20.
The volume of address activity and the increase in new addresses are somewhat connected with DOT’s market success.
This indicates that although a bearish Q1 may result in low address activity, a bullish Q1 will probably attract more investors to get on board.
Demand was weaker over the past three days, which made room for a retracement.
Despite this, the bears have also shown some weakness, which may open the door for another bullish attack. The financing rates for Binance and DYDX already show that demand in the futures market is rapidly increasing.
The mood of the market right now is also changing. This demonstrates that investors’ expectations have changed to be more optimistic.
This reinforces the positive expectations, but if more FUD materializes in the future, the bears can still win back the upper hand.