Polygon (MATIC) price has been rejected at $0.70 multiple times in the past week amid frantic recovery attempts by the bulls. Crypto exchanges ending support for MATIC and other altcoins have contributed to the recent price correction. Can the bullish investors defy the negative sentiment to keep the Polygon pice rally going?
Robinhood is set to end support for MATIC, Cardano (ADA), and Solana (SOL) on June 27. The prominent crypto trading platform made the announcement on June 9 in proactive response to the SEC’s recent court filings against Binance and Coinbase.
As the landmark delisting date arrives, the ongoing MATIC price rally has suffered a mild setback around the $0.70 range. However, on-chain data suggest that the bulls could soon seize control of the market again.
Polygon Investors Have Staked Over 100 Million Tokens This Month.
The SEC market FUD has caused MATIC price to suffer a significant setback this month. But on-chain data shows that investors began to stake en masse rather than sell once the price dropped below $0.77 on June 7.
Between June 7 and June 26, MATIC holders staked an additional 158 million tokens (1.7% of the circulating supply).
Notably, over the past 1 year, the Polygon network has witnessed comparable spikes in staking activity by more than 100 million tokens on October 2022 and January 2023. The chart below shows that MATIC’s price soared by 70% and 93% on both occasions.
Supply in Smart Contracts evaluates staking activity by measuring changes in the percentage of tokens in circulation currently deposited in smart contracts.
When it increases considerably during a price correction, as shown above, it indicates that holders are growing unwilling to sell. Rather, they are turning to yield-bearing protocols to mitigate potential losses.
If the bullish trend repeats, as it did in October 2022 and January 2023, MATIC holders can anticipate another rally above the $1 milestone in the coming weeks.
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MATIC Holders Are Moving Tokens Off Exchanges
Since the SEC filings hit the newswires, MATIX investors have been increasingly moving their tokens off exchanges. While some are of opting for long-term self-custody options, a large percentage are seeking passive income opportunities to mitigate their losses.
MATIC balance on exchanges has plummeted to new lows in the past month. The Balance on Exchanges metric tracks the total amount of a particular cryptocurrency deposited in recognized crypto exchange wallets.
As of June 26, 2023, it sits at 1.074 billion MATIC. The chart below shows how investors moved about 161 million MATIC out of exchanges between June 9 and June 26.
Investors withdrawing tokens from exchanges often positively impacts the price for a few reasons. Firstly, self-custody reduces the number of tokens readily available to be traded on exchanges.
This drastic drop in market supply across crypto exchanges often forces buyers to compete by offering higher prices.
Secondly, when investors move tokens from exchange wallets into DeFi staking protocols, they help secure the network and provide much-need liquidity to projects hosted on the blockchain.
In summary, the drop in market supply and increased staking actively will likely help Polygon sustain the current bullish momentum.
MATIC Price Prediction: Is $0.75 the Next Target?
Given the steady growth in Polygon staking activity, the price will likely rally toward $0.75 in the coming weeks. However, MATIC must first break above the initial resistance at $0.70.
According to IntoTheBlock’s Global In/Out of The Money Around Price (GIOM) data, 2,480 investors that bought 109.81 million MATIC at the average price of $0.70 could trigger a pullback.
But if Polygon can scale that resistance zone, it could reach push past the $0.75 price target.
Still, the bears could invalidate the Polygon price rally if it unexpectedly drops below the critical $0.65 support zone. Although, the 4,310 investors that purchased 561.2 million tokens at an average of $0.65 will likely prevent the drop.
However, if that support level cannot hold, MATIC could fall below $0.60 once again.
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