Polygon (MATIC), the Ethereum scaling solution, has been embroiled in a persistent downtrend since early April, with the price plummeting below the critical $0.91 support level. The ongoing bearish pressure has pushed MATIC to trade below its 2023 yearly low, currently hovering around $0.492.
Despite valiant efforts from bulls, the cryptocurrency market has been unforgiving, with MATIC nearly retesting its 2022 low of $0.316 on August 5th. This downward trajectory has raised concerns among investors about the token’s future.
Network Activity And Accumulation Fail To Stem The Tide
To gauge the health of a cryptocurrency, on-chain metrics are often analyzed. However, for MATIC, these indicators have offered little solace to bulls. While the number of new addresses created and active addresses has shown some resilience, it hasn’t been enough to counteract the overall bearish sentiment.
Interestingly, negative flows have indicated MATIC is being moved out of exchanges. Yet, this accumulation appears insignificant compared to the token’s market capitalization and daily trading volume.
Why is MATIC Struggling to Recover?
The prolonged downtrend has eroded investor confidence, with each minor rally becoming an opportunity for holders to exit their positions. This selling pressure is reflected in the On-Balance Volume (OBV) indicator.
Technical analysis also paints a grim picture. The Awesome Oscillator has been firmly below the zero line for two months, signaling persistent bearish momentum. Moreover, while the circulation metric has dropped, indicating potential accumulation, the velocity has increased, suggesting heightened volatility and speculative trading.
Also Read: Polygon (MATIC) Soars 124% – Is A $1 Rally Imminent?
A glimmer of hope comes from the mean dollar invested age, which has been trending upward, implying long-term holding behavior. However, this positive signal is overshadowed by the bearish dominance in other indicators.
In conclusion, Polygon (MATIC) is facing a formidable challenge from the bears. While some on-chain metrics hint at potential accumulation, the overall market sentiment and technical indicators remain overwhelmingly negative. A sustained price recovery will require a significant shift in market dynamics and a reversal of these bearish trends.
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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