As a seasoned crypto investor with a knack for spotting trends and interpreting market data, I find myself grappling with a peculiar predicament when it comes to Polygon (MATIC). The recent plunge below the $0.5 support level has left me wary, but not entirely disheartened.
In simpler terms, the value of Polygon (MATIC) has fallen below a significant support point at $0.5, which could lead to additional price decreases. This sudden drop can be attributed to multiple traders who swiftly sold their tokens when Polygon hit this support level during the ongoing bearish trend in the larger cryptocurrency market.
Polygon Faces Significant Selling Pressure
On the IntoTheBlock market intelligence platform, the Exchange-Onchain Market Depth indicator reveals that Polygon is experiencing a substantial wave of selling activity. Following the coin reaching $0.5, over 90 million tokens were offloaded by traders. This tool monitors the order books of the leading 20 exchanges and presents the average price at which buyers and sellers are willing to transact with the token.
The Polygon bulls failed to protect their key support at $0.5, according to IntoTheBlock’s data, which indicates approximately 55 million tokens were purchased at an average price of $0.49. This situation suggests that Polygon might experience more price drops, as the number of sell orders remains higher than buy orders, as suggested by IntoTheBlock’s findings.
Despite the recent wave of sell-offs, it seems that major Polygon investors, known as whales, have remained optimistic about the MATIC token. They’ve seized this price drop as an opportunity to buy more tokens, as suggested by a surge in net flows from large holders by over 1,700% within the last seven days, according to IntoTheBlock data, which points towards accumulation among these investors.
3 out of every 10 Polygon token holders are currently making a profit, potentially setting the stage for further decreases in the crypto’s value. If the price doesn’t recover quickly enough, around 96% of investors who are currently losing money might decide to sell off their tokens, causing another round of selling and possibly driving down the price of MATIC even more.
Due to its declining prices, Polygon has fallen out of the top 20 cryptocurrencies in terms of market capitalization. At this moment, according to CoinMarketCap data, it ranks as the 21st largest crypto token by market cap, following Litecoin.
Market Conditions Not Making It Easier For MATIC
The broader crypto market’s current situation has played a role in Polygon’s recent decrease. Lately, Bitcoin plummeted to around $63,500 from its previous level of $69,000, pulling down other cryptocurrencies as well. Coins such as MATIC have experienced steeper price declines due to their close relationship with the value of Bitcoin.
The flagship crypto has experienced this price decline thanks to the rising tensions in the Middle East, with Iran and Israel at the forefront. However, the market is expected to pick up again soon enough, meaning that tokens like MATIC could enjoy a massive rebound sooner rather than later. The first goal will be for the crypto token to reclaim the crucial support level at $0.5.
Currently, Polygon’s price stands approximately at $0.48. Over the past day, it has experienced a decline of nearly 2%, as indicated by data sourced from CoinMarketCap.
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2024-08-02 14:10