#ActiveUserImpact

The number of **active users** on a blockchain can significantly impact its price trends and overall market perception. Here’s how:

### **1. Network Demand & Utility**

- More active users indicate growing adoption, increasing demand for the native token.

- High transaction volumes suggest real-world utility, making the asset more attractive to investors.

- Examples: Ethereum (ETH) sees price surges when DeFi and NFT activity spikes, showing strong network usage.

### **2. Price Correlation with Active Users**

- Historically, **rising active addresses correlate with price increases**, as seen in Bitcoin (BTC) and Ethereum.

- If active users drop, it can signal weakening interest, leading to lower liquidity and price stagnation.

- Sudden spikes in new addresses could indicate **whale accumulation** or retail FOMO.

### **3. On-Chain Metrics to Watch**

- **Daily Active Addresses (DAA)**: Measures the number of unique wallet addresses interacting with the blockchain daily.

- **Transaction Volume**: Tracks the amount of value being transferred, reflecting network engagement.

- **New vs. Returning Users**: High new user growth suggests adoption, while many returning users indicate strong retention.

### **4. Institutional & Developer Interest**

- Institutional investors monitor active users as a sign of sustainable network growth.

- A growing developer community (e.g., Ethereum, Solana) increases long-term value by driving innovation and utility.