The number of new addresses for FTM dropped, as did development activity.
FTM is overbought, indicating a possible correction in its value.
The price of Fantom [FTM] increased by 5.55% in 24 hours after the smart contract platform revealed some details about the Sonic upgrade on March 25.
Fantom describes Sonic as the next step in delivering better throughput.
Anticipations of an upgrade have fueled bullish sentiment towards the coin for some time. According to AMBCrypto, this is one of the reasons why the price exceeded $1.
However, not many players know the in-depth details of Sonic's upgrades. So on Monday, Fantom Foundation CEO Michael Kong published a blog explaining what users should expect.
Dedication is down, but the stakes are high
Kong said the upgrade will improve the bridging of tokens on the network. He also mentioned how it will enhance security, off-chain execution and on-chain verification.
Kong explained,
“Sonic will be used to create a new first-class shared sequencer for L1 and L2 chains, capable of processing over 180 million daily transactions with true sub-second confirmation times, and serve as a foundation for relaunching Fantom to the community. A new brand centered around.”
Prior to the recent memo, the Fantom community was convinced that the development would move the project forward. Additionally, the demand for FTM has been increasing.
However, AMBCrypto found that Fantom’s development activity has stopped compared to before. On March 22, on-chain data obtained from Santiment showed that the indicator was 0.24.
But as of this writing, the metric has dropped to 0.31. This decline means developers have slowed down their commitment to perfecting Fantom.
Usually, this can be a bearish signal. If it remains unchanged, the price of FTM may be affected. Like development activity, network growth has also declined.
FTM will slow down
This metric tracks the number of new addresses making their first transaction on the network. Therefore, the decline means that FTM adoption has experienced some decline.
On the daily time frame, the exponential moving average (EMA) shows a bullish trend for FTM. This is because the 20 EMA (blue) has crossed the 50 EMA (yellow).
Additionally, the Awesome Oscillator (AO) is positive, indicating increasing upward momentum. However, the appearance of red bars indicates that the upward momentum may stall in the short term.
Additionally, AMBCrypto analyzes the Money Flow Index (MFI). At press time, MFI was near 80.00, indicating that the coin is overbought. Following this trend, prices may retrace slightly.
However, there are predictions that the price will rise to $2 after the upgrade. But for now, there are no guarantees, considering Fantom has yet to confirm development figures.