Polygon (MATIC), the Ethereum scaling solution, has witnessed a surge in user activity in 2024, with daily active addresses spiking a staggering 200% since the year began. This stands in contrast to the broader cryptocurrency market, where attention has been captured by developments like Bitcoin ETFs and memecoins.
However, despite the surge in active users, the price of MATIC hasn’t followed suit. The token experienced a 19% price correction, currently exhibiting a bearish trend with lower lows and lower highs. To reverse this trend, MATIC needs to break past the $0.6346 resistance level and target $0.6886.
Technical indicators offer mixed signals. The Relative Strength Index (RSI) sits at 52.65, suggesting some underlying bullish momentum. However, the Awesome Oscillator (AO) is negative, indicating short-term weakness and a potential continuation of the downtrend.
On-chain metrics paint a slightly brighter picture for MATIC. Network growth has surged significantly, implying an influx of new addresses accumulating the token at current prices. The velocity of MATIC transactions has also increased, suggesting more frequent trading activity.
Interestingly, the data reveals a retail-driven surge in MATIC accumulation. While new addresses are accumulating, Santiment data suggests that large holders (with over 10,000 MATIC) have been selling their holdings. This indicates that retail investor interest is currently the primary driver of network growth.
Also Read: Polygon (MATIC): Boom or Bust? Project Update Fuels Uncertainty Despite $1 Billion Grant
However, this enthusiasm isn’t shared by derivatives traders. Data from Coinglass shows a significant drop in MATIC Open Interest, suggesting a decline in futures and options trading activity.
Polygon’s user base is expanding rapidly, but the price needs to overcome resistance levels and attract more institutional interest to reverse the current downtrend. Whether retail investor interest can sustain the network’s growth in the long run 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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