Polygon (MATIC) price has dropped by 18% since the team announced plans to migrate from MATIC to a new “POL” native token on July 13. Have the token migration plans sparked bearish concerns within the Polygon community?
After a promising start to July, Polygon (MATIC) has run into choppy waters over the past week. On-chain data suggests that the token migration plans have raised some uncertainty among Polygon investors. Will it evolve into a prolonged bearish trend?
New MATIC Wallet Addresses Have Dwindled Since the Migration Announcement
As they await clarity on the token migration plans, crypto investors have grown reluctant to open new MATIC wallets on the Polygon network.
The Network Growth data compiled by Santiment shows that on July 20, investors opened 2,893 new MATIC wallet addresses. But by the close of July 26, it had dropped by a whopping 78% to just 626 new addresses.
Network Growth roughly estimates the daily rate at which a blockchain network attracts new users. When it starts to decline, as observed above, it signifies decreased network participation.
Conspicuously this drop in MATIC Network Growth has coincided with the POL Tokenomics launch on July 19. If this persists, MATIC could struggle to find sufficient demand to propel it out of the current bearish trend.
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Whale Investors are Also Taking on a Negative Disposition
Furthermore, a price-savvy cohort of whale investors has started to take bearish positions on MATIC. This confirms the concern surrounding the migration from MATIC to POL token.
Specifically, the whales holding balances of 10 million to 100 million MATIC have sold off 23 million coins between July 18 and July 27.
At the current market value of $0.72, the withdrawals made by the whales are worth $16.5 million. Historical data shows that this particular whale cohort’s recent buy/sell trends have been closely correlated to MATIC price actions.
If strategic retail investors choose to mirror their trades, the ongoing MATIC sell-off could intensify over the coming weeks.
MATIC Price Prediction: The $0.70 Support is Crucial
The on-chain indicators analyzed above illustrate that the bearish MATIC price momentum could linger on if it loses the $0.70 support level. However, the 10,000 investors that bought 270 million MATIC tokens for a minimum price of $0.69 could offer initial support.
But if that support buy-wall caves, MATIC could drop as far as $0.65
Still, the bulls could stage an unlikely comeback if the recent MATIC pushes above $0.80. But as seen above, 51,000 investors that bought 1.34 billion MATIC tokens at the maximum price of $0.80 could slow the rally.
Nevertheless, MATIC could reclaim $0.85 if that resistance level gives way.
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