- Polkadot address activity is picking up as market conditions improve.
- DOT order hanging in the balance as the market seeks more directional clarity.
Polkadot has had a healthy start to its operations so far this year, as have most of the popular blockchain networks. But we can’t really get a clear understanding of what to expect without a reference point. A recent Messari report revealed the state of Polkadot in the fourth quarter of 2022.
Read about Polkadot [DOT] Price forecast 2023-2024
According to Messari’s report, Polkadot’s daily active accounts grew 64% in Q4 2020 while new accounts grew 49% in the same period.
This is notable because the market reached its lower band during the same quarter, which was marked by the FTX Black Swan event.
10/ @thedotted Q4 22 a @employee
+ Daily active accounts and new accounts increased by 64% and 49%, respectively.
+ XCM has broadcasted more than 166,000 transmissions across 70 channels
+ Treasury financing 571 thousand POINT$ Through Eth-to-Polkadot Snowbridge
🔗 https://t.co/Xh2PVxPhYf pic.twitter.com/gun1NXein6
– Messari (MessariCrypto) February 10, 2023
It’s easy to assume that Polkadot’s user activity could grow at a higher rate in the first quarter of 2023, based on data from the Messari report.
A market recovery may encourage further user growth, but this does not necessarily have to be the case. The same report reveals that Polkadot’s user growth may have been driven mostly by users migrating from FTX.
However, a strong rebound in the first quarter could also help support stronger user activity and growth. This strong user growth reflects the strong increase in active social users in December. Prelude to the increase in volume that manifested itself in early January.
Strong title activity contributed significantly to the DOT demand observed in January.
Can DOT keep up the momentum?
The Department of Transportation’s results so far in February confirm the slowdown in demand and significant selling pressure.
It has fallen nearly 13% from its press-time price of $6.20, after investors were scammed by FUD.
The amount of address activity and new address growth is somewhat related to DOT’s market performance.
This means that a bullish first quarter is likely to encourage more investors to jump in while the opposite outcome could lead to lower headline activity.
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So what does the application status look like now? The past few days have been marked by declining demand, which set the stage for a rebound.
Despite this, the bears also showed relative weakness, paving the way for another bullish attack. Binance and DYDX funding rates already indicate that demand is gradually recovering in the derivatives market.
The current market sentiment is also changing. The weighted sentiment gauge has shown some bullishness in recent days. This confirms that investors have shifted their expectations to the positive side. It also reverses a downward reversal.
Notably, DOT’s price performance is showing some upside at the time of writing. This confirms the bullish outlook but the bears could still regain control if more FUD appears on the way.