The recent upgrade of Polygon, known as the Ahmedabad hardfork, has generated excitement following its successful launch on the mainnet.
By implementing key protocol improvements through PIP-30, PIP-36, and PIP-45, Polygon aims to boost contract sizes from 24 KB to 32 KB and enhance the efficiency of the plasma bridge.
As of the current moment, POL is priced at $0.4346, marking a 3.88% increase in 24 hours, reflecting a favorable market response to these upgrades. Will these enhancements lead to sustained growth, or is the current market optimism temporary?
Insights from On-Chain Data: Bulls Are Active
An analysis of on-chain data provides valuable insights into the impact of the Ahmedabad hardfork. The number of active addresses surged by 20.59% over the last 24 hours, now totaling 2,112. This rise indicates heightened engagement within the network.
Moreover, transaction volumes witnessed a significant spike of 79.78%, with 2,910 transactions recorded in the past day according to CryptoQuant.
Consequently, the increased network activity showcases improved usability and scalability, leading to greater participation. It seems that the hardfork has indeed stimulated notable growth within the network.
Exchange Netflow: A Cause for Concern?
Despite the positive on-chain data, the exchange netflow paints a more cautious picture.
According to CryptoQuant, net deposits to exchanges surged by 4,693.89%, totaling 59,628.38 POL at the present time, indicating potential selling pressure.
Historically, substantial deposits often precede significant sell-offs, hinting that some investors may be gearing up to take profits following the recent price increase.
Thus, it is advisable to exercise caution in the coming days as selling pressure could rise, impacting the token’s short-term performance.
Long/Short Ratio: Bears Remain in the Shadows
Adding another layer of complexity is the long/short ratio, which reveals that 57.93% of traders hold short positions, while only 42.07% are in long positions.
Despite the positive on-chain trends, many market participants are cautious about a possible correction.
Given the uncertain market sentiment, traders may opt to hedge their positions in anticipation of a market downturn.
Bulls Leading the Way, Stay Cautious
The Ahmedabad hardfork has clearly elicited a positive response for Polygon, with a surge in active addresses, transactions, and price reflecting strong fundamental growth.
Nevertheless, with notable exchange inflows and bearish sentiment in the futures market, exercising caution is crucial.
Although the bulls seem to have the upper hand, investors should remain watchful, considering the possibility of a short-term correction looming ahead.