The Polygon futures data showed bullish short-term sentiment but on-chain metrics revealed a wave of selling could impede the uptrend.
The daily chart showed that the market structure was bullish after the recent move but the weekly chart spelt trouble.soared last week and established a strong short-term uptrend. The local resistance at $0.43 was decisively broken and the bulls were strong enough to drive a rally to the higher timeframe resistance zone at $0.58.This price move was accompanied by the Open Interest doubling to indicate high bullish sentiment. Since then, the price has fallen by 7.
This meant that a price bounce to the $0.552-$0.569 region for instance would lead to a wave of selling as underwater holders look to exit at break even.AMBCrypto found that the daily active addresses metric has trended downward over the past month. This indicated reduced network adoption and demand for the token.
The price surge meant the weighted sentiment had reached its highest point since May, but another metric served as a warning to buyers. The dormant circulation skyrocketed on Wednesday, the 21st of August. Usually, a flurry of token movement on this scale implies a wave of selling activity was nearby. Such a selling wave may materialize soon and push prices lower.The daily chart showed that the market structure was bullish after the recent move. The indicators were also in favor of the buyers.The market has shown its hand, and prices will likely consolidate around $0.56-$0.58 in a distribution phase before a move south toward $0.5 or $0.45 occurs.
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