The Polkadot breaking above the 4-hour Ichimoku cloud may be a sign of potential positive momentum.
With Polkadot’s JAM introduction, modularity and security are to be improved by replacing the Relay Chain.
Both technical and on-chain signals have been driving recent price increases in Polkadot (DOT). CoinMarketCap data show the DOT’s price as of right now is about $7.2, slightly down 0.48% in the last 24 hours and going up by 7.37% in the previous week.
DOT Price: Venturing Past the Ichimoku Cloud
Polkadot has climbed beyond the 4-hour Ichimoku cloud technically. Such action points to possible bullish momentum. Returning to the cloud at this point, though, might indicate a change in trend.
DOT is getting close to the lower Ichimoku cloud boundary on the daily chart; this is an important level to monitor for price swings in the future. Breaking the daily Ichimoku cloud might mean that the price is still rising near $8.
Chain Data: New Addresses and User Interaction
With two straight monthly drops in the number of new addresses on the Polkadot Relay Chain, the chart data points to a negative tendency. This decline suggests strongly that Polkadot is having trouble drawing in new users to its network.
A consistent decline in new addresses may have an impact on the overall health and development of the Polkadot ecology.
Additionally declining are active addresses, a crucial metric of user involvement and network condition. This pattern may indicate that current users are waning in activity, maybe as a result of a dearth of interesting initiatives, new developments, or incentives to keep them involved.
It might also be a reflection of more general market dynamics impacting the bitcoin industry as a whole, such as users turning more circumspect or concentrating on other platforms.
A drop in active addresses for a blockchain like Polkadot that emphasizes interoperability could indicate difficulties keeping its distinct value offer above alternative Layer 0 or Layer 1 solutions.
Implications for Prices and Transfer Volume
The 7-day moving average (7DMA) of daily transfers on the Polkadot Relay Chain reveals a notable declining tendency. The number of transfers has been falling continuously since January 2024, when they almost hit 40,000 per day.
This decrease in transfer volume is one of many factors that might have an impact on Polkadot’s price. In the long run, less transfer activity is typically correlated with less network usage overall and less demand for the native DOT token.
Polkadot is moving strategically even with conflicting signals from on-chain data and technical indicators.
As previously reported by ETHNews, Polkadot has replaced the Relay Chain with JAM, which improves security and modularity for roll-up management in blockchain operations. This action should increase Polkadot network scalability and reliability.
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