Active User Impact describes the impact of the number of active users on the Crypto market, including token price, liquidity, ecosystem growth momentum, and investor confidence. Tracking the number of active users helps predict market trends, assess project health, and optimize investment strategies.
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1. What are Active Users in the Crypto market?
Active Users refer to the number of unique wallet addresses making transactions within a certain time frame (24 hours, 7 days, 30 days). It can be categorized by:
Users on the blockchain: Total number of active wallets on a specific blockchain (Ethereum, BNB Chain, Solana…).
Users on dApp: Number of users interacting with a decentralized application (DeFi, GameFi, NFT marketplace…).
Users on exchanges (CEX & DEX): The number of traders executing transactions on Binance, Coinbase, Uniswap…
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2. The impact of Active Users on the Crypto market
2.1. Impact on token prices
User growth → Increased demand for tokens → Price increase
If many newcomers join, they need to buy tokens to use services in the ecosystem.
For example: When Axie Infinity peaked in players, the price of AXS also surged.
User decline → Decreased demand → Price decrease
If a project loses users, tokens can lose value due to decreased interest.
For example: GameFi lost players towards the end of 2022, leading to a sharp decline in token prices.
2.2. Impact on liquidity and the DeFi market
DeFi users increase → DEX liquidity increases → Lower transaction fees
If many participants provide liquidity, the price spread will decrease, helping the market to be more stable.
For example: The explosion of Uniswap in 2020 significantly increased DEX liquidity.
Users withdraw liquidity → Higher price risk
If users withdraw funds from the liquidity pool, token prices may fluctuate more dramatically.
2.3. Impact on the blockchain ecosystem
High user count → Increased gas fees → Competition among blockchains
When Ethereum has many users, gas fees increase, driving the development of Layer 2 (Arbitrum, Optimism).
More users help the ecosystem grow → Increased investment from large funds
Blockchains with high user counts like Solana and Polygon often attract investment from large funds.
2.4. Impact on NFT and GameFi
High user count → NFT and game token prices increase
If many players join the blockchain game, token and NFT prices will rise due to high demand.
For example: When StepN has many users, the price of GMT rises sharply.
Users leave → NFT prices drop sharply
If users abandon the project, NFTs can lose value quickly.
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3. Tools to track Active User Impact
Dune Analytics: View the number of users on various blockchains.
Glassnode, Nansen: Track on-chain activity and user cash flows.
DefiLlama: Analyze users on DeFi protocols.
DappRadar: Check the number of users in dApp and GameFi.
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4. Trading strategy based on Active User Impact
Buy tokens when the number of users spikes
If a project has a continuously increasing user base, it could be a sign of growth.
Exit when user numbers gradually decline
If a project starts losing users, token prices may drop sharply.
Choose ecosystems with sustainable user growth
Prioritize blockchain or dApp with steadily increasing user numbers, not just due to FOMO effects.
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5. Conclusion
Active User Impact is a crucial factor in assessing the health of the Crypto market. The number of active users can directly impact token prices, liquidity, the blockchain ecosystem, and NFTs. Closely monitoring this metric helps investors make more accurate trading decisions.
