Polygon, the popular Ethereum scaling solution, is facing a period of uncertainty as its native token, MATIC, grapples with a potential price decline. This comes amidst the upcoming migration to a new token, POL, scheduled for September 4th, 2024.
MATIC Trades Lower, Large Holders Exit
At the time of writing, MATIC sits at a price of $0.53, reflecting a nearly 10% drop in the last month. This downtrend seems likely to continue as major investors have been steadily reducing their holdings. Data from IntoTheBlock reveals a staggering 271% plunge in MATIC’s large holder netflow over the past 30 days. These “large holders” are entities with significant MATIC reserves, and their selling spree indicates a lack of confidence in the token’s short-term prospects.
Whale Woes: Unrealized Losses Plague Investors
Further dampening investor sentiment is the fact that a vast majority of MATIC holders are currently underwater. IntoTheBlock data shows that a whopping 93% of all MATIC addresses are “out of the money,” meaning they purchased their tokens at a higher price than the current market value. This translates to unrealized losses, disincentivizing whales from holding onto their MATIC.
Also Read: Polygon PoS Gets A Makeover: MATIC To POL Migration Set For September 4th
Technical Indicators Signal Bearish Bias
Technical analysis also paints a bleak picture for MATIC. The token’s Directional Movement Index (DMI) showcases a bearish bias, with the negative directional indicator (-DI) positioned above the positive directional indicator (+DI). This suggests that the downtrend currently holds more power than any potential uptrend. If this trend continues, analysts predict a possible plunge to $0.42, a price point last seen in July 2022.
However, a complete collapse isn’t guaranteed. If market sentiment shifts and demand for MATIC surges, the token could see a price increase to $0.63. The upcoming POL token migration’s impact on MATIC’s long-term value remains to be seen.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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