Assessing the factors behind Polygon’s rebound
- MATIC was the best-performing asset out of the top 20 cryptocurrencies in the last 24 hours.
- The growth in new addresses and open interest contributed to the hike.
The price of Polygon [MATIC] outclassed every other asset in the top 20, according to data from CoinMarketCap. In the last 24 hours, the price tracking platform showed that MATIC gained 9.24% while crossing above $0.70— a point it had struggled to overrun in the last 30 days.
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However, the token’s run-up the charts did not suddenly appear without some underlying factors. On-chain analytic platform Santiment, in its 10 July tweet, pointed out that an increase in network growth played a part in ensuring that MATIC did not plunge.
? $MATIC is on a mini run today, with a +6% price rise in the past 8 hours. Some positive on-chain signs for the 12th ranked market cap asset include rebounding network growth, decreasing supply on exchanges, and low profit taking. https://t.co/EB4njHmn1W pic.twitter.com/NmwvNQY89j
— Santiment (@santimentfeed) July 10, 2023
New recruits spark
Network growth describes the number of new addresses that have participated in sending or receiving a token for the first time. And according to Santiment, MATIC’s network growth increased to 1550 as of 9 July.
This increase implies that MATIC had gained new ground as per investors’ interest, and the Polygon network traction had increased. In several cases, this acts as vigor behind the price action.
Another influential factor behind MATIC’s price rise was the supply on exchanges. At press time, MATIC’s supply on the exchange decreased to 8.4%. Previously, as of 9 July, the same metric had spiked to 9.7%.
Such a high rate depicts action by market participants to take a profit. But now that the exchange supply decreased, it means that the broader intent to sell off some of the tokens has reduced. Usually, this helps price action against facing a sharp fall.
Social authority and an increasing interest
Furthermore, MATIC’s social dominance reached its highest point since July began. Social dominance considers the share of discussions of an asset compared to others in the top 100 per market capitalization.
As shown above, the hike to 1.062% signals that the token has gained increased attention from the broader market. Also, this serves as a bullish signal. Hence, the metric was able to influence the increase in MATIC’s value
Meanwhile, Coinglass revealed that MATIC’s Open Interest over the last 24 hours has significantly increased. The Open Interest is described as the total number of futures contracts held by market participants at the end of a trading day.
How much are 1,10, 100 MATICs worth today?
When the Open Interest decreases, it means that money was flowing out of the market and there was no strength behind the price action.
Therefore, the increase in MATIC’s Open Interest means that more positions have been opened than have been closed. As a result, this puts MATIC in a pole position for a further price increase, barring any major change.