Polygon (MATIC) Price Flashes Mixed Signals Amid Market Downturn, What’s Next?
Polygon (MATIC) jumped 6% as markets reacted to Ethereum’s successful network upgrade, but on-chain data suggest the jury is still out on MATIC long-term prospects. Will the Polygon bulls stand firm to prevent a major price correction?
Polygon (MATIC) dispelled bearish concerns to deliver a blistering 7% growth in the aftermath of the Shapella upgrade. But the hawkish mood among whales and the inflow of coins on exchanges suggests that MATIC could soon retrace below $1.
Crypto Whales Grow Hawkish After Shapella Upgrade
A critical cohort of crypto whales spent the week that preceded the Ethereum network upgrade accumulating MATIC. But according to Santiment’s on-chain data, they have now taken a neutral stand.
In the build-up to the Ethereum network upgrade, whales holding balances of 100,000 to 100 million MATIC acquired 50 million coins worth $51 million between April 5 and April 12.
The chart below shows how the whales have now grown hawkish, keeping their balances around 523 million coins since April 12.
Polygon (MATIC) Price vs. Whale Supply Distribution. April 2023, Source: Santiment
Whales Supply distribution tracks the inflow and outflows from wallet balances of large investors. When whales stop buying, it casts a shadow on the overall market sentiment surrounding the underlying network.
MATIC Holders Are Pining for a Sell-Off
As the market awaits the next move of the whales, the influx of tokens on exchanges further suggests MATIC holders could soon enter a mild sell-off.
Glassnode’s on-chain data reveals a 4% spike in MATIC Exchange Balance in the past week. Exchange Balance is a financial metric that tracks, in real-time, the number of coins sitting in recognized exchange wallets.
The chart below shows that the MATIC exchange balance increased from 860 million coins to around 893 million between April 10 and April 19.
Polygon (MATIC) Price vs. Exchange Balance. April 2023, Source: Glassnode
When holders move their tokens to exchanges, it often indicates that they are looking to exit their long positions or pounce on short-term trading opportunities. This increased selling pressure can trigger a price correction if it is not met by adequate demand.
In summary, the hawkish mood among whales and the influx of coins on exchanges suggest that MATIC’s price could soon mirror the current downtrend in the broader crypto market.
MATIC Price Prediction: The Retracement Could Stabilize Around $0.95
IntoTheBlock’s Global In/Out of The Money depicts that MATIC could hit a significant buy-wall around $0.95, which could halt the drop momentarily.
The chart below shows that MATIC will likely lose its current support at $1.10. Although, the 57,000 addresses holding 669,000 coins could attempt to shore up the price. However, if that support level fails, the 50,000 addresses that bought 4.5 billion MATIC for an average price of $0.95 will be the next line of defense.
Polygon (MATIC) GlOM Price distribution. April 2023, Source: IntoTheBlock
Still, the bulls may invalidate the bearish market sentiment if MATIC price can scale the $1.18 resistance zone. But as observed above, the 15,000 addresses holding 578 million coins will likely dampen the momentum. But if it breaches that resistance zone, Polygon(MATIC) could continue the rally toward $1.29.
