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- The Polygon Foundation has deposited millions of MATIC tokens, prompting concerns of selling pressure on MATIC’s price.
- Despite this, the sentiment around MATIC remains positive, but network growth is declining. Traders continue to bet on MATIC’s price growth.
Polygon’s MATIC Faces Selling Pressure Amid Large Deposits
Polygon’s native token, MATIC, finds itself at a critical juncture as recent data reveals substantial token deposits by the Polygon Foundation. These deposits, amounting to millions of MATIC tokens, have raised concerns about potential selling pressure on MATIC’s price and have prompted questions about the foundation’s motives.
Noteworthy MATIC Sell-Off by Polygon Foundation
Data from Lookonchain indicates significant activity related to the Polygon Foundation. Addresses linked to the foundation have deposited substantial amounts of MATIC tokens, with one address depositing 6 million MATIC ($3.35 million) in just two days and another depositing 4.6 million MATIC ($2.57 million) in the past month. This influx of MATIC tokens into the market from the Polygon Foundation has fueled concerns about its potential impact on MATIC’s price.
Positive Sentiment and Key Metrics
Despite the large token deposits, sentiment around MATIC remains largely positive at the time of reporting. MATIC is trading at $0.561, demonstrating strength in both its price and sentiment indicators. The MVRV ratio, a key profitability metric for MATIC holders, has surged, suggesting that more profitable addresses hold MATIC and may consider selling for profit, potentially pressuring the token’s price.
Declining Network Growth
However, Polygon’s network growth is on the decline, which could negatively influence MATIC. Network growth refers to the number of new addresses that have transferred MATIC for the first time and overall activity. A diminishing growth rate may reflect reduced interest in the MATIC token among new addresses.
Trader Optimism Persists
On the trading front, traders maintain optimism about MATIC, with 51.56% of all positions being long, as per Coinglass’ data. This sentiment indicates that a majority of traders anticipate MATIC’s price to continue growing.
Network Activity and DeFi Comparison
Despite MATIC’s price volatility, the Polygon network has sustained robust activity, surpassing all Layer 2 solutions in terms of active users and transaction volume. However, within the DeFi sector, Polygon lags behind Arbitrum in terms of Total Value Locked (TVL) and decentralized exchange (DEX) volume.
In conclusion, MATIC faces a critical juncture with potential selling pressure from large token deposits. While sentiment remains positive, declining network growth and comparisons within the DeFi sector could influence MATIC’s future trajectory. Traders continue to express optimism, but the weekend’s trading activity may provide further insights into MATIC’s short-term prospects.
