- The price of DOT has fallen by double digits over the past month.
- This is due to the low activity on Polkadot.
Polka dots [DOT] According to data, the value has fallen by almost 20% in the past month CoinMarketCap.
An on-chain assessment of activity on the Proof-of-Stake (NPoS) blockchain network found that demand has declined since the beginning of the year, hence the double-digit decline in DOT’s value.
At the time of writing, DOT was exchanging hands at $6.73, a price level last seen in September 2023.
Source: CoinMarketCap
Bears endanger DOT holders
DOT’s price movements observed on a 24-hour chart showed significant bear presence.
For example, the Directional Movement Index (DMI) showed its positive directional index (green) at 12.76, remaining below the negative directional index (red) at 25.94.
When these lines are positioned this way, the downtrend is considered to be stronger than the uptrend because the selling pressure has much greater momentum than the accumulation.
DOT’s Average Directional Index (yellow) confirms the strength of the downtrend and rallied at 26.19. When an asset’s ADX is above 25, it indicates that the current market trend is strong.
Furthermore, a look at DOT’s Moving Average Convergence Divergence (MACD) revealed that the indicator crossed below the trendline on December 31, 2023, and has been positioned in this position ever since.
This crossing is interpreted as a bearish crossover and a signal for traders to sell. The surge in selling pressure has led to a 20% drop in DOT’s price since the beginning of the year.
Source: TradingView
In the currency’s derivatives market, Futures Open Interest has fallen since the beginning of the year.
According to data from Mint glassDOT closed the trading session on January 21 with open interest of $221 million, down 17% from the $265 million it recorded on January 1.
Interestingly, despite the falling price and open interest, DOT Futures traders have continued to open leveraged positions in favor of a price rally.
Data from Coinglass shows that DOT has only seen positive funding rates on crypto exchanges since the beginning of the year.
However, as the altcoin’s price continues to decline, long traders have seen liquidations, reaching an all-time high of $8 million so far on January 3.
Source: Coinglass
Little demand for Polkadot
An on-chain assessment of network activity on Polkadot found that there has been a decline in user activity since the beginning of the year.
Read Polkadots [DOT] Price forecast 2023-24
As of January 21, it recorded a daily number of transactions of 14,100 – the lowest number since the start of 2024.
Source: Het Blok
The number of new addresses created daily on the Polkadot network has also fallen 20% over the past 21 days, according to The Block’s dashboard.