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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.
$MATIC has slipped below a crucial supply zone, spanning $0.84 to $0.86. In this range, 14,240 addresses hold over 4.13 billion #MATIC.
The longer the #Polygon price remains below this zone, the higher the likelihood that these holders might start selling to avoid incurring… pic.twitter.com/fc7eOmjOYp
— Ali (@ali_charts) November 23, 2023
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.
