In an impressive rally, Polygon (MATIC) has soared by 27.37% over the past week, reaching a trading price of $0.5274 at the time of writing. With a robust 24-hour trading volume of $730.3 million, MATIC has also seen an 11.70% price increase within the last 24 hours. Despite this significant uptrend, market analysts are urging caution as technical indicators suggest a potential correction.
Caution Advised Amidst Price Surge
Ali, a seasoned market analyst, notes that while Polygon’s recent surge is notable, the TD Sequential on the hourly chart is signaling a possible correction. “Polygon has seen a significant surge in recent days, but caution is advised. The TD Sequential on the hourly chart is signaling a potential correction for $MATIC,” Ali remarked. This warning has traders on high alert as they monitor technical indicators that might suggest a pullback after the recent rally.
According to data from IntoTheBlock, the majority of long-term MATIC holders are currently experiencing losses. The Global In/Out of the Money chart reveals that 90.44% of addresses, representing 587,240 accounts, are “Out of the Money,” meaning their purchase price exceeds the current value of MATIC. Only 5.34% of addresses, or 34,680 accounts, are showing a profit, while 4.22% are at break-even. This widespread loss among long-term holders could be contributing to the selling pressure observed in the market.
In contrast, active MATIC addresses present a more optimistic scenario. A substantial 79.75% of active addresses, equating to 1,020 accounts, are “In the Money,” reflecting a profit from the recent price increases. Nonetheless, 15.58% of these active addresses are “Out of the Money,” suggesting that some traders may face risks if a correction occurs.
Upcoming Migration to POL
Adding another layer to the current market dynamics, Polygon is preparing for a significant transition. On September 4, 2024, POL will replace MATIC as the native gas token for Polygon’s Proof-of-Stake (PoS) network. This migration will occur automatically through a smart contract, converting MATIC to POL on a 1:1 basis. Users need not take any action; the transition will ensure seamless transactions on the Polygon network. The Polygon bridge will also support POL, maintaining smooth interoperability with Ethereum.
Also Read: Polygon [MATIC] Surges 27.37% In A Week – What’s Next For Investors?
Despite the potential for a price correction, the Polygon network is exhibiting strong activity. Over the last 24 hours, Polygon has processed 3.27 million transactions and welcomed 55,169 new addresses. The total value locked (TVL) in the Polygon ecosystem stands at $889.09 million, with recent inflows of $1.67 million, according to DefiLlama.
In summary, while MATIC’s impressive price growth captures the spotlight, traders and holders must stay vigilant. The potential for a market correction and the upcoming transition to POL highlight the need for careful consideration in navigating the current landscape of Polygon.
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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