User Activity as a liquidity indicator:

1. Number of Unique Addresses – A high and growing number of unique wallet addresses can indicate a broad user base and increased adoption, which often correlates with better liquidity.

2. Active Addresses (Daily/Monthly) – Shows how many addresses are actively sending or receiving funds. A higher count signals ongoing user engagement and transactional activity.

3. Transaction Count and Volume – Frequent transactions, especially with significant volume, suggest the asset is in regular use, not just held passively — a sign of healthy liquidity.

4. Address Distribution – If tokens are well-distributed across many holders (not just concentrated in a few wallets), it generally supports more liquid and less volatile markets.

5. Network Utilization (on-chain metrics) – High usage of the blockchain (e.g., gas fees paid, smart contract interactions) shows the ecosystem is active, which boosts confidence and trading interest.