Daily Active Addresses (DAA) gauges the health of a blockchain network, representing the number of unique addresses associated with transactions on a given day.
A rising Daily Active Addresses indicates more usage of a cryptocurrency and a wider number of participants. As a measure of demand for a cryptocurrency, Daily Active Addresses removes the transfers conducted by exchanges. You can track the number of active addresses for different cryptocurrencies on CoinMetrics.
The chart below shows the 50-day average for Daily Active Addresses for bitcoin superimposed over the bitcoin price to show the relationship between the two variables. The two variables have tracked each other very closely with increases in the number of active addresses usually associated with an increasing price.
The peak in the daily active addresses at the same time as the peak in the price of bitcoin. Similarly, the DAA posted a low during early 2019 as the price bottomed out. Research from Panony shows that the number of active addresses is highly correlated (+0.76) with the closing price on the next day and the average closing price of the next week.
Looking at the metrics for Ethereum, we see a similar relationship between the number of active addresses and the price of ether. Apart from the large spike in late 2016, the number of active addresses and the price of ether are closely linked.