Polygon’s native token, MATIC, has endured a significant downturn, marking a double-digit decline over the past week. The cryptocurrency witnessed a 15% reduction in its price within a 7-day period, with ongoing concerns about the potential for further losses.
MATIC recently slipped below a critical supply zone ranging from $0.84 to $0.86. This breach occurred on Tuesday, with data from the In/Out of the Money indicator on IntoTheBlock revealing that 14,240 wallet addresses collectively acquired 4.13 billion MATIC tokens within this price range.
Polygon Price Lingering Below Crucial Zone
As of the latest update, MATIC is trading at $0.7771. The prolonged stay of Polygon’s price below the crucial zone raises the specter of a possible sell-off by the aforementioned 14,240 wallet addresses, intensifying the selling pressure on MATIC. The reluctance of Layer 2 token holders to incur more substantial losses adds to the overall downside risk.
These on-chain metrics align with the thesis of a MATIC price decline. The Network Realized Profit/Loss (NPL), an on-chain metric gauging the average daily profit/loss of all token transactions, reveals consistent spikes in NPL from November 4 to November 22. This suggests that MATIC holders engaged in profit-taking during this period, a bearish signal that amplifies selling pressure.
Additionally, another crucial metric tracking the selling pressure on MATIC, the supply on exchanges as a percentage of the total supply, witnessed an uptick. Between November 10 and 22, this metric increased from 7.98% to 8.80%, coinciding with MATIC token inflows on centralized and decentralized exchanges. The data reinforces a bearish outlook for the asset’s price.
As of the latest report, MATIC is valued at $0.7771, with the altcoin experiencing minimal change in price over the past 24 hours.
