Altcoin
Hedera network activity grows despite declining transactions: What does it mean?
- The Hedera network saw a decline in transactions but growing activity.
- Negative sentiment and increased volatility were observed despite increasing volume and revenue.
New data on 7 February revealed a decline of 53% in transactions on the Hedera [HBAR] network. However, this did not hamper the network’s growing activity.
Ok, but what about YoY total txn decline?
It's not a particular point of concern. The drop in txns comes from the consensus service.
Massive txn growth in the other services:
– Crypto: +18%
– SC: +362,537%
– Token: +713%And consensus txns trending up, QoQ… pic.twitter.com/hi8nyazjEi
— Elaine Song (@ElaineSong7) February 6, 2023
Read Hedera’s [HBAR] Price Prediction 2023-2024
One major metric that has seen a significant increase in the Hedera network is the number of daily active users, which rose by an impressive 348% over the last quarter. This suggested that the network had been able to maintain a steady user base despite the decline in transactions.
Signs of growth
Besides growing active user numbers, the revenue generated by Hedera has also increased. This is due to the growing TVL on the network, as users continued to deposit their assets into the Hedera network.
The data also showed a surge in development activity on the network. This increase in activity suggested that new updates and upgrades could be on the horizon. The rise could help to address any issues that may contribute to a decline in transactions and further boost the growth and adoption of Hedera.
Source: Defi Llama
How did HBAR react?
The HBAR token observed growth in volume as a result of these happenings. This suggested that the frequency with HBAR was being traded was relatively high.
Despite the positive metrics, sentiment towards the HBAR token declined. This is also reflected in the decrease in overall mentions of Hedera, which fell by 10.8% in the last week according to data from LunarCrush. A negative outlook among the crypto community could impact investor confidence.
Source: Santiment
Due to the decline in sentiment, HBAR’s market dominance fell to 0.15% of the overall market at press time.
How much is 1,10,100 HBAR worth today?
Coupled with declining market dominance, HBAR’s volatility also increased, indicating that it would be riskier for investors to buy HBAR at this time. This increased volatility could further affect investor confidence.
Source: Messari
It remains to be seen how these factors impact the HBAR token. At press time, HBAR was trading at $0.06839 and fell by 1.93% in the last 24 hours, according to CoinMarketCap.
