Healthy network adoption is often characterized by an uptick in daily active users, more transaction throughput, and increased demand for blockspace (and vice-versa). The number of New Addresses on-chain can be an effective tool to gauge both the magnitude, trend and momentum of activity across the network.

Due to intraday volatility in on-chain activity metrics, the absolute value of new addresses on any given day can be uninformative. However, comparing the magnitude and trend of new addresses entering the market on a monthly and yearly basis can be much more informative.

This metric, compares the monthly average 🔴 of new addresses against the yearly average 🔵 to underline relative shifts in dominant sentiment and help identify when the tides are turning for network activity.

• Monthly 🔴 > Yearly 🔵 indicates an expansion in on-chain activity, typical of improving network fundamentals, and growing network utilization.

• Monthly 🔴 < Yearly 🔵 indicates a contraction in on-chain activity, typical of deteriorating network fundamentals, and declining network utilization.

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This metric was first featured by Glassnode in The Week On-chain newsletter (Week 34, 2022 and Week 43, 2022)