See More

Can Polygon (MATIC) Price Avoid Dropping to $0.50 Amid Token Migration Fears? 

2 mins
Updated by Ryan Boltman
Join our Trading Community on Telegram

In Brief

  • Polygon (MATIC) price is now down 18% since the team announced plans to migrate from MATIC to a new POL native token. 
  • On-chain data shows that only 543 new MATIC addresses were created on July 25, the  lowest user acquisition rate since June 1.
  • A price-savvy whale cohort has offloaded 23 million MATIC token within the last two weeks setting the pace for the ongoing price downtrend.
  • promo

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. 

Can Polygon (MATIC) Avoid Price Drop | Network Growth, July 2023
Can Polygon (MATIC) Avoid Price Drop | Network Growth, July 2023, Source: Santiment

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. 

Crypto investing, simplified. Get price predictions here: Polygon (MATIC) Price Prediction 2023/2025/2030

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. 

Can Polygon (MATIC) Avoid Price Drop | Network Growth, July 2023
Can Polygon (MATIC) Avoid Price Drop | Whale Holding Balances, July 2023, Source: Santiment

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

Polygon (MATIC) Price Prediction | NVT ratio, July 2023
Polygon (MATIC) Price Prediction | NVT ratio, July 2023 | Source: IntoTheBlock

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.

Top crypto projects in the US | July 2024
Harambe AI Harambe AI Explore
Uphold Uphold Explore
Exodus Exodus Explore
Coinbase Coinbase Explore
Chain GPT Chain GPT Explore
Top crypto projects in the US | July 2024
Harambe AI Harambe AI Explore
Uphold Uphold Explore
Exodus Exodus Explore
Coinbase Coinbase Explore
Chain GPT Chain GPT Explore
Top crypto projects in the US | July 2024

Trusted

Disclaimer

In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

jsn.jpeg
Ibrahim Ajibade
Ibrahim Ajibade Ademolawa is an experienced On-chain research analyst who began his career in Commercial Banking. He has worked with several Web3 startups and financial institutions —analyzing technical concepts and spectacular events that link the DeFi and TradFi worlds. He holds a Bachelors’ Degree in Economics and is currently pursuing an MSc. in Blockchain & Distributed Ledger Technologies.
READ FULL BIO
Sponsored
Sponsored