Polygon (MATIC) Price Steadies Above $0.50—Investor Sentiment Remains Uncertain
Read about the recent price recovery of Polygon (MATIC) token and the doubts surrounding investor sentiment and HODLing. Will the price steady above $0.50 or fold under pressure? Find out more.
Posted 10 months ago in Altcoins
Polygon (MATIC) has held steady above the $0.50 support level as altcoins gained ground on Bitcoin (BTC) over the weekend. Key on-chain indicators raise doubts that investors will HODL long enough to further drive the MATIC price recovery attempts.
Renewed Network Activity Has Fueled MATIC Recovery Attempt
Confidence seems to gradually return to the Polygon ecosystem as MATIC’s price recovered from its 2023 bottom of $0.48 to reclaim $0.52. On-chain data indicates that the recent increase in Polygon network activity could be behind the ongoing price resurgence.
The CryptoQuant chart below shows that the Polygon network recorded 4,621 transactions on September 22. Notably, this is the highest network traction in more than 50 days.
By tracking the daily number of confirmed transactions, the transaction count metric estimates the level of economic activity on a blockchain network. Such a significant rise in network activity typically means that the underlying native token is in demand. Unsurprisingly, MATIC’s price has witnessed an 8% price bounce as it sits at $0.51 as of September 25.
Investors are Keeping Their Chips On the Table
Earlier this month, Binance announced it would delist Polygon-hosted assets from its NFT Marketplace on September 26. In response to the bearish news, MATIC holders moved 3.5 million tokens into exchanges within 72 hours of the September 8 announcement, bringing the total number of MATIC tokens in exchange-hosted wallets to 983.7 million.
As expected, the negative sentiment surrounding the exchange inflows eventually sent the MATIC price to $0.48 on September 11. But curiously, MATIC holders have not undone the bearish action since then. Despite the noticeable price increase since September 11, MATIC exchange reserves still currently stand at 982.3 million tokens.
The exchange reserves metric tracks the total deposits that holders of a cryptocurrency Polygon investors currently hold in recognized exchange-hosted wallets. Typically, when investors keep a significant amount of token exchanges, it suggests that they may be looking to sell once prices become more favorable rather than HODL for a prolonged recovery. The stagnation in Polygon network activity and relatively high exchange reserves could trigger another MATIC price correction.
MATIC Price Prediction: Potential Drop to $0.45
From an on-chain perspective, losing the $0.50 could trigger a freefall toward the $0.45 level before the MATIC price finds significant support.
The In/Out of Money Around Price data, which outlines the purchase price distribution of the current Polygon investors, also supports this narrative. As shown below, 23,250 addresses had bought 181.2 million MATIC tokens at the minimum price of $0.50. If they make frantic last-ditch buys to cover their positions, Polygon native token price could rebound.
Polygon (MATIC) Price Prediction | GIOM data
Still, Polygon bulls can wrestle control MATIC price rebounds above $0.80. However, as seen above, the 66,000 addresses had bought 1.7 billion tokens at an average price of $0.70. If exchange reserves remain high, they could book early profits and send MATIC into a bearish reversal.
But if the bulls can scale that sell wall, then MATIC price could break above $0.80 for the first time since July 2023.
Last updated 9/25/2023, 9:41:34 PM
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