Polygon’s pledge to ETH drives confidence; will MATIC whales go easy?

• MATIC experiences a surge in bullish sentiment but the bulls remain subdued.
• Assessing whether a sizable bullish play could be in the works.

Bullish excitement is once again taking center stage as the market cools off from the bearish assault that prevailed in August. The MATIC token in particular registered a massive bullish sentiment spike but is this a precursor to a significant rally?

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MATIC concluded August with the return of bullish sentiment after an overall bearish month. This was evident from the altcoin’s weighted sentiment metric which rocketed aggressively in the last three days to a four-week high. This confirmed that investors switched in favor of bullish expectations.

Source: Santiment

In addition to the weighted sentiment spike, MATIC’s on-chain volume also went up considerably during the same period. These findings suggested that there was a significant surge in on-chain activity. The timing makes it more interesting considering that MATIC recently bottomed out and has already bounced back slightly from its bottom range.

MATIC peaked at $0.63 during Tuesday’s (29 August) trading session, marking an 18% upside from its August lows. It has since pulled back slightly and exchanged hands at $0.57 at press time.

Source: TradingView

Is MATIC ready for a strong rally?

MATIC’s recent upside allowed it to bounce off from the oversold zone. The last time the token was oversold, was in mid-June. The bulls took over and managed to rally by over 50%. Additionally, the ongoing price action suggested that history was repeating itself.

Furthermore, Polygon is actively looking to bolster its commitment to the Ethereum network.

In collaboration with @WenLlama, @phoenixlabsdev, and @hexensio, we set out to align the growth of the Polygon Ecosystem with continued sustainable support of Ethereum, directly in the core contracts powering Polygon 2.0.

A thread on Polygon Ecosystem’s commitment to Ethereum.

— Polygon (Labs) (@0xPolygonLabs) August 30, 2023

One of the main goals of this development will be to streamline yields on deposits in the Ethereum network. In other words, this focus will allow Polygon to maintain its attractive among users. Utility may not necessarily have a major impact on MATIC’s price action. That designation is mainly for the whales. So, let’s take a look at what is happening on the whale side of things.

Read Polygon’s [MATIC] price prediction 2023-24

According to MATIC’s supply distribution metric, there has been some accumulation recently. Especially from whales holding between 1 million and 100 million MATIC coins (grey and yellow) in the last 24 hours. Furthermore, addresses holding between 100 million and 1 billion MATIC (green) also eased off on sell pressure.

Source: Santiment

While the supply distribution confirmed that some whales have been buying, it also pointed out that the selling pressure may not be over. Addresses holding over 1 billion (red) were still seen contributing to selling pressure.

This same category of whales currently controls over 49% of MATIC’s circulating supply. The same whale category was also responsible for holding back MATIC bulls.