Polkadot’s network activity has reached its lowest point since January, with DOT’s price trading within a narrow range and selling pressure increasing.
Points
- Polkadot’s Relay Chain and parachains see a decline in user activity.
- Only 170,111 active addresses completed transactions this month.
- New user activity on Polkadot’s Relay Chain has dropped by over 75% since March.
- DOT’s price faces resistance at $6.53 and support at $5.56.
- Increasing selling pressure could push DOT to an eight-month low.
Polkadot （DOT） is experiencing a significant decline in user demand, with network activity on its Relay Chain and parachains poised to close July at the lowest levels since January. According to data from The Block, only 170,111 active addresses have completed at least one transaction on Polkadot’s Relay Chain this month, marking the lowest monthly active user count since the beginning of the year.
Additionally, new user activity has plummeted, with only 27,900 unique addresses participating in a transfer for the first time on the network, a more than 75% drop from the year-to-date high of 112,000 new addresses in March. The parachains on the Polkadot network have also seen a 21% decline in new addresses created this month.
This decline highlights waning interest in Polkadot among new and existing users. At press time, DOT is trading at $5.68, having traded within a horizontal channel since the beginning of July. The price has faced resistance at $6.53 and found support at $5.56.
A horizontal channel forms when an asset’s price consolidates within a range for an extended period, indicating a balance between buying and selling pressures. However, increasing selling pressure is pushing DOT towards the support line. If the bulls cannot defend this level, a downtrend will be confirmed, potentially leading to a further decline to an eight-month low of $4.93.
Explanation
- The significant drop in network activity indicates reduced interest in Polkadot, both from new and existing users.
- The trading range of DOT within a horizontal channel suggests a period of consolidation but also highlights the risk of a downtrend if selling pressure continues.
- Understanding support and resistance levels helps predict potential price movements and identify strategic trading opportunities.
- The decline in new user activity underscores the challenges Polkadot faces in attracting and retaining users amid growing competition in the blockchain space.
