MATIC spikes, but is that really the whole story?

• MATIC’s Weighted Sentiment slipped deeper into negative territory.
• Polygon’s NFT market continued to flourish, with $90 million in sales thus far in January.

Polygon [MATIC] climbed nearly 3% in the last 24 hours of trading, snapping the week-long losing streak that saw the cryptocurrency lose 9.7% of its market value, as per data from CoinMarketCap.

Source: CoinMarketCap

But it’s not what you think it is!

Counterintuitively, MATIC’s USD trading volumes fell by more than 50% during the same period, according to AMBCrypto’s analysis of Santiment data.

Typically, low trading volumes in an uptrend are interpreted as bearish signals. This is because traders are not interested in buying the asset.

Moreover, decreasing volume in an uptrend may suggest that it’s time to sell and take profits. However, this should not be taken as market advice and readers were encouraged to perform their due diligence before making any moves.

Source: Santiment

The Weighted Sentiment also slipped deeper into the negative territory, lending credence to MATIC’s bearish narrative.

MATIC falls out of favor with derivatives traders

MATIC’s speculative interest tumbled since the start of the year. According to Coinglass, the Open Interest (OI) in MATIC futures was $199 million as of this writing, down 34% year-to-date (YTD).

Source: Coinglass

Additionally, the number of short positions taken for the coin has consistently surpassed longs since the start of 2024.

Goes to sure that derivatives traders were not too bullish on MATIC as of this publication.

Polygon’s NFT market looks good

However, not everything was gloomy and negative. According to a recent X post, Polygon blockchain recorded $90 million in NFT sales thus far in January, the highest monthly volume since April 2022.

NEW: Polygon has passed $90M in NFT sales volume for the month of January so far.

The highest monthly volume since April 2022. pic.twitter.com/0yiYfiwgFl

— Today In Polygon (@TodayInPolygon) January 20, 2024

Polygon held strong as the fourth-largest blockchain for NFT trading over the last month, with sales totaling more than $100 million, according to CryptoSlam. This represented a jump of 70% over the previous month.

Source: CryptoSlam

Read Polygon’s [MATIC] Price Prediction 2023-24

Earlier this month, the layer-2 (L2) chain achieved a historic milestone by flipping Ethereum [ETH] in 24-hour NFT sales for the first time.

The driving force behind the Polygon NFT boom was the collections from Web3 game Gas Hero.  Gas Hero Common Heroes was the second-most traded collection over the last month, with sales exceeding $35 million.