Polygon [MATIC] has experienced a substantial price surge over the past week, with a notable increase of 27.37%. As of press time, MATIC is trading at $0.5274, supported by a robust 24-hour trading volume of $730.3 million. The cryptocurrency has seen an 11.70% increase in value in just the last 24 hours, highlighting strong bullish momentum. However, market analysts are advising caution as technical indicators suggest that a potential pullback could be on the horizon.
Ali, a respected market analyst, commented, “Traders are closely monitoring these technical indicators as they suggest the possibility of a pullback after the recent rally.” This cautious outlook comes despite the recent gains, reflecting concerns that the price surge may not be sustainable in the short term.
Long-Term MATIC Holders Face Challenges
While MATIC’s recent performance has been impressive, data from IntoTheBlock paints a more complex picture for long-term holders. The Global In/Out of the Money chart indicates that a significant portion of long-term MATIC investors are currently facing losses. Specifically, 90.44% of addresses, equivalent to 587,240, are “Out of the Money,” meaning these holders purchased MATIC at a price higher than its current value. This situation could contribute to increased selling pressure, as many holders may look to cut their losses.
In contrast, only 5.34% of addresses, or 34,680, are currently in profit, while 4.22% of addresses are at break-even. This data underscores the challenges faced by long-term investors, who are seeing little return on their investment at current levels.
However, the scenario is different for active traders. The majority of active addresses, 79.75%, or 1,020 addresses, are “In the Money,” having benefited from the recent price increases. This suggests that short-term traders have managed to capitalize on the market’s volatility, though 15.58% of active addresses are still “Out of the Money,” indicating that some could be at risk if a market correction occurs.
Upcoming Migration from MATIC to POL
Looking ahead, the Polygon network is preparing for a significant transition as it migrates from MATIC to POL as its native gas token on September 4, 2024. This migration will be conducted automatically through a smart contract, converting MATIC to POL on a 1:1 basis. POL will replace MATIC for powering transactions and securing the network, ensuring seamless continuity for users.
The migration is expected to be smooth, with no required action from MATIC holders. The Polygon bridge will support POL, enabling seamless interoperability between Polygon and Ethereum.
Also Read: Polygon’s (MATIC) Surge 28% as Whale Activity and Positive Sentiment Drive Rally
Despite these developments, the potential for a price correction remains a concern for traders. The Polygon network continues to show strong activity, with 3.27 million transactions completed in the last 24 hours and the addition of 55,169 new addresses, reflecting growing interest in the platform. The total value locked (TVL) in the Polygon ecosystem currently stands at $889.09 million, with inflows of $1.67 million in the past 24 hours, according to DefiLlama.
As the market awaits the upcoming migration and monitors technical indicators, traders and investors remain cautious, balancing the recent gains with the potential risks ahead.
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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