Polygon: Is MATIC under sell pressure?
- MATIC experienced a notable sell-off by large addresses linked to the Polygon Foundation.
- Despite the token sale, traders remained optimistic about MATIC’s future, while network growth slowed down.
Polygon [MATIC], despite facing a competitive landscape in the realm of layer 2 solutions, has managed to hold its ground. Recent developments, however, suggest potential impacts on the growth of its native token.
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Large MATIC sell-off
Lookonchain’s data revealed noteworthy activity related to the Polygon Foundation. Addresses linked to the Polygon Foundation have deposited substantial amounts of MATIC tokens, amounting to millions of dollars, on the Binance exchange within a short period. Notably, one address deposited 6 million MATIC ($3.35 million) in just two days, while another deposited 4.6 million MATIC ($2.57 million) in the past month.
Is Polygon Foundation selling $MATIC?
— Lookonchain (@lookonchain) September 7, 2023
This influx of MATIC tokens into the market from the Polygon Foundation raises concerns about potential selling pressure on MATIC. It prompts questions regarding the foundation’s motives as well.
Despite these developments, the sentiment around MATIC remains largely positive at the time of reporting. MATIC was trading at $0.561, with both its price and sentiment indicators showing strength.
The MVRV ratio, a key metric indicating the profitability of MATIC holders, also surged. This suggested that more profitable addresses hold MATIC and may be inclined to sell for profit, potentially putting pressure on the token’s price.
However, Polygon’s network growth was on the decline, a factor that may negatively influence MATIC. Network growth refers to the number of new addresses that have transferred MATIC for the first time and the overall activity for MATIC. The diminishing growth may reflect decreased interest in the MATIC token for new addresses.
Traders remain optimistic as Polygon continues to do well
On the trading front, despite whale sell-offs, traders remained optimistic about MATIC, with 51.56% of all positions being long, as per Coinglass’ data. This sentiment indicates that a majority of traders are betting on MATIC’s price growing further.
Realistic or not, here’s MATIC’s market cap in BTC terms
Despite MATIC’s price volatility, the Polygon network maintained robust activity. It surpassed all Layer 2 solutions in terms of active users and the number of transactions occurring on the network.
However, within the DeFi sector, Polygon trailed behind Arbitrum in terms of Total Value Locked (TVL) and decentralized exchange (DEX) volume.