The recent upgrade of Polygon, known as the Ahmedabad hardfork, has generated excitement as it was successfully deployed on the mainnet.
By implementing important protocol upgrades 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.
Currently, the price of POL stands at $0.4346, showing a 3.88% increase in the last 24 hours, indicating a positive market response to these advancements. Can these changes sustain growth, or is the current market enthusiasm fleeting?
On-chain Analysis: Bulls Active
Insights from on-chain data shed light on the impact of the Ahmedabad hardfork. Active addresses have surged by 20.59% in the past 24 hours, reaching a total of 2,112, indicating heightened network engagement.
Moreover, transaction counts have spiked by 79.78%, with 2,910 transactions logged in the last day according to CryptoQuant.
As a result, the increased activity showcases enhanced usability and scalability of the network, attracting more participation. Therefore, the hardfork seems to have stimulated substantial network expansion.
Exchange Netflow: A Cause for Concern?
Despite promising on-chain data, exchange netflow paints a more cautious picture.
As per CryptoQuant, net deposits to exchanges have soared by 4,693.89%, totaling 59,628.38 POL currently, hinting at potential selling pressure.
Historically, significant deposits often precede notable sell-offs, indicating that certain investors may be gearing up to secure profits following the recent price uptick.
Thus, prudence is advised in the coming days as selling pressure could rise and impact the token’s short-term performance.
Long vs. Short Ratio: Bears Remain
Furthermore, the long/short ratio adds complexity to the scenario. Presently, 57.93% of traders have taken short positions, while only 42.07% are long.
Despite positive on-chain activities, many market participants remain cautious about a possible correction.
With market sentiment displaying uncertainty, traders may opt to hedge their positions in anticipation of a market pullback.
Bulls Leading the Way, Caution Advised
The Ahmedabad hardfork has undoubtedly elicited a positive response for Polygon. The surge in active addresses, transactions, and price signifies robust fundamental growth.
Nonetheless, given the substantial exchange inflows and bearish sentiment in the futures market, caution remains necessary.
While the bulls currently appear dominant, investors should stay vigilant, as a short-term correction could still be looming.