Polkadot (DOT) ends July with a bearish note as user engagement hits 2024 lows

Polkadot (DOT) displayed an unwelcoming performance in July, losing around 12% on its monthly chart. DOT underperformed as the bellwether Bitcoin jumped 8%, while Ethereum saw a brief 2% slide within the past 30 days.

Dwindled user engagement contributed to Polkadot’s weakness in the last couple of sessions.

The altcoin’s user activity plunged to 2024 lows, triggering worries about DOT’s future price actions.

Polkadot’s declines user engagement

The Block data confirms Polkadot’s dire condition, with activity on Relay Chain & parachain hitting yearly lows.

Source – The Block

Stats show only 170,111 addresses actively transacted on the Relay Chain in July. That marks the lowest monthly figure since January 2024.

Moreover, new wallets that transacted for the first time on Relay Chain were 27,900, a whopping 75% plunge from the peaks of 112K new addresses in March.

Also, the Parachain platform saw a 21% slump in user activity.

Such developments confirm reduced user participation and interest in Polkadot.

Investors confident in Polkadot’s potential recovery

While price actions paint an ugly picture for Polkadot, on-chain indicators suggest optimism. Investors aren’t selling despite the declining prices.

Subscan data shows DOT’s 24-hour holder account increased to ATHs of 1,354,554, with around 80 players joining since yesterday.

The arrival of new investors demonstrates trust in DOT’s potential recoveries. Moreover, the skyrocketing on-chain volume reflects a healthy and active ecosystem.

Also, the Short/Long ratio shows approximately 74% of investors are executing longs on DOT. That reflects long-term optimism despite fear dominating the near–term.

DOT price outlook

The native token changed hands at $5.52 at press time, down 3% over the past day.

Polkadot maintained a bearish stance through July, losing 12% of its value last month.

The past month saw DOT in a consolidative mode as it traded within a horizontal channel since early July, with resistance at $6.53 and support at $5.56.

Failure to keep the closest foothold ($5.56) could push DOT to 8-month lows of $4.93.

However, broad market developments will influence Polkadot’s trajectory in the upcoming sessions.

Despite Bitcoin’s swift dip from $70K to $66K, experts remain upbeat about the market.

For instance, institutional players are about to add BTC to their balance sheets, a move poised to propel the leading crypto and altcoins to anticipated highs.

“We now have additional companies coming out and saying we’re going to put #Bitcoin on our balance sheet as a strategic treasury asset.” – @billfour pic.twitter.com/rAEBqkfxzS

— Michael Saylor⚡️ (@saylor) July 30, 2024

Improved broad market sentiments will likely rescue Polkadot from its downtrends.

Bullish waves could push SOT prices to the neared resistance at the 50-day Exponential Moving Average, coinciding with the $6.17 price mark.

Overcoming this hurdle will open the doors to the massive barrier at $7, beyond which DOT will smoothly sail to new peaks.

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