Polygon is witnessing one of the largest spikes in whale exchange inflows of the year as 60 million tokens are moved to exchanges.
The whale in question, according to the on-chain analytics platform, Santiment, is one of the largest self-custody Polygon addresses, whose recent action caused the exchange supply of the network to increase to a five-week high of 7.92%. This is the second-largest surge in tokens switched to exchanges this year, Santiment noted.
Typically tokens transfers of such scale by whales leave a significant impact on the overall health of the network. Although these moves might be a sign of market activity and liquidity, they can also cause market volatility and price fluctuations, therefore it’s crucial for investors to exercise caution when such activity occurs.
Whales which are large holders, generally move their tokens to exchanges with the intention of selling them.
It’s also important to keep in mind that this specific whale has self-custody, which could be a plausible explanation for the significant movement of tokens. According to Santiment, the whale still holds a sizable quantity of MATIC, holding 3.78 billion tokens.
“Be cautious when whale exchange inflows happen. But note that the whale still owns 3.78B”, the data platform added.
A few months ago, a Polygon whale deposited $5.2 million in MATIC to Binance, data from the cryptocurrency transaction tracker service Whale Alert showed.
Over 4 billion MATIC tokens were moved to the Ethereum blockchain in a few hours.
Polygon: Whale Movements Are Crucial Price Indicators
Given that the amount involved is quite significant, it is safe to assume that a large-scale investor could be behind the transaction.
In order to determine if an asset has a bullish or negative price outlook, traders and investors typically watch the movements of these cohorts of holders, who have the ability to influence market prices.
The direction of the asset’s value can be determined by such substantial transactions, regardless of whether they were undertaken for buying or selling motives [or possibly neither of these].
MATIC in tandem with the altcoin troupe was trading in the red. At the time of writing this article, the ninth biggest crypto was down 3% in the last 24 hours at $0.96, per CoinMarketCap.