98% of MATIC Holders in Loss: Can the POL Rebrand Spark a MATIC Price Rally?

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As a seasoned crypto investor with battle scars from the 2017 bull run and the subsequent bear market, I can’t help but feel a mix of excitement and apprehension regarding the Matic price rebranding to POL. The market indicators paint a worrying picture, with declining active addresses, reduced user engagement, and an overwhelming majority of investors in the red.

The chatter about Matic price is growing within the crypto world, with the date for renaming the MATIC token to POL approaching on September 4th. This change is a part of Polygon 2.0’s plan to improve the blockchain’s security and functionality. Yet, approximately 97.74% of MATIC holders are currently experiencing losses. Will this rebranding generate enough excitement to lift up the struggling token?

Worrying On-Chain Metrics Ahead of Rebrand

Lately, the market conditions haven’t been ideal for MATIC investors. There’s been a consistent downtrend in Polygon’s daily active users and network expansion since mid-April 2024, with brief upticks here and there. For instance, between August 11 and 12, the number of active addresses plunged dramatically from over half a million to only 88,200. Furthermore, the transaction count dropped drastically from over 130,000 to just 16,900, suggesting a substantial decrease in user interaction and network activity.

Compounding these challenges, most MATIC investors are deep in the red. According to data from IntoTheBlock, 97.74% of MATIC holders, with over $32 million in tokens, are currently “out of the money,” while only 1.49% are seeing any profitability.

Moreover, whale transactions have spiked only after price rallies, indicating a pattern of profit-taking rather than accumulation. This behavior has added downward pressure on the MATIC price.

MATIC has also emerged as one of the worst-performing large-cap cryptocurrencies year-to-date, with a 56% drop as of August 11. This decline is in line with other underperforming assets like Lido Finance (-60%), Optimism (-62%), Arbitrum (-63%), and DYDX (-65%).

However, technical analysis suggests there may still be some hope for the layer 2 network.

Can Bulls Turn the Tide on Matic Price?

In simpler terms, the current Matic price seems to be showing a positive short-term trend, hinted by the succession of higher lows and the formation of an ascending triangle structure. Yet, it’s important to note that the long-term outlook remains negative, as the price continues to stay below both its 200-day moving average (represented by the black line at 0.5047) and its 50-day moving average (shown by the green line at 0.4348).

As an analyst, I’m observing a developing ‘ascending triangle’ formation around our current pricing. If the price manages to breach the upper resistance of this triangle, it could be a sign of impending bullish movement.

As a researcher analyzing MATIC‘s price movements, I’ve noticed that there’s some resistance forming around the $0.4348 mark. Should we manage to break through this level, it might trigger a test of the significant resistance at $0.5047. Conversely, a supportive zone can be found near $0.4150. If this support gives way, the next line of defense would be at $0.4000 (orange zone).

In simpler terms, the Relative Strength Index (RSI) currently stands at 49.14, indicating a balanced state. This means the asset isn’t showing signs of being excessively bought (overbought) or sold (oversold), leaving potential for price fluctuations in either direction.

In simpler terms, the Chaikin Money Flow (CMF), a tool that measures buying and selling activity for an asset, stands at 0.13, suggesting some buying interest. This is consistent with the possibility of a bullish breakout occurring within the rising triangle pattern.

Overall, the technical indicators are neutral to bullish in the short term for Matic price.

98% of MATIC Holders in Loss: Can the POL Rebrand Spark a MATIC Price Rally?

If MATIC‘s price surpasses $0.4348, it might trigger a shift in trend, potentially propelling the asset towards $0.5331. Yet, for a consistent rise, overcoming the significant barrier at $0.5047 is crucial. A long-term goal could be around $0.6000 if the 200-day EMA can be broken and maintained.

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2024-08-13 11:42