- OM’s price surged by 57.85% in the last month
- Mantra’s new address creation rate plummeted by 99.7% over the past 3 months
Mantra’s Address Creation Rate Declines
Source: X
Although Mantra has been experiencing positive growth in its price trends, its adoption rate has been decreasing.
As per Ali Martinez, Mantra’s network has significantly contracted, with a sharp decline of 99.7% in new address creation. This decline indicates a decrease in new users joining the network, reflecting reduced interest, demand, and on-chain activity.
Source: IntoTheBlock
This decline in adoption rate is evident as it dropped from 53% to 23% in the past week.
Such a significant drop could lead to a reduction in the user base, resulting in lower demand for transactions and decreased network activity. It indicates a lack of new users entering the market, along with existing users closing their positions.
Source: Santiment
Furthermore, Mantra’s Price DAA divergence has consistently been negative over the last three weeks, reinforcing the decline in network activity.
Historically, a decrease in network users has preceded a drop in the price of its native tokens, reflecting bearish market sentiments. In this scenario, the diminishing demand is gradually impacting OM’s price movement negatively.
Impact on OM’s Charts?
Despite the decline in Mantra’s adoption rate in recent months, OM’s price has remained resilient. Currently, the altcoin is trading at $7.53, showing a 5.73% increase in the last 24 hours.
Moreover, this bullish trend has extended to the monthly charts with a significant surge of 57.85%.
Source: Coinalyze
Despite the price surge, overall market sentiment remains bearish.
For instance, most investors are taking short positions, with 52.66% in the Futures market being short and 47.3% long. Dominance of short positions indicates a bearish sentiment where traders anticipate a price drop in the near future.
Source: Coinglass
Furthermore, there has been an influx of exchanges compared to outflows in the market. Additionally, OM’s netflows turned positive, reaching $1.02 million after three consecutive days of negativity. A positive netflow suggests more traders are transferring their OM tokens to exchanges, likely for selling purposes.
If this selling pressure continues, it could impact OM’s price negatively.
In essence, despite the price increase of OM, the network’s fundamentals show weakness. The decline in adoption rate is a clear indicator of this weakness. To sustain its recent gains, the network requires new addresses and increased user activity.
Typically, low demand leads to lower prices. Therefore, if the adoption rate continues to decline, speculative demand may drive the price down, with a potential retracement to $7.0 for OM.
However, if the speculative uptrend holds in the short term, the altcoin may aim for $8.