The Decline in Polygon (MATIC) Price and Its Implications for Investors
The Polygon (MATIC) price has been facing scrutiny lately due to a decline in Daily Active Addresses. This decline has reached a seven-day Moving Average low not seen since February 27. Additionally, 51% of MATIC holders are currently facing losses, which may cause them to hold onto their assets in hopes of future price recoveries.
Another concerning factor is the recent formation of a death cross in MATIC Exponential Moving Average (EMA) lines. This indicates a persistent bearish trend, casting shadows over the immediate outlook for the cryptocurrency.
Polygon Active Addresses Are Declining
In recent times, there has been a notable uptick in the number of MATIC Daily Active Addresses, indicating a strong growth pattern. From February 1 to March 14, there was a significant increase in daily active addresses, rising from 1,946 to 3,301, representing a growth rate of 69.63%.
However, this growth has shown signs of deceleration over the past eight days, as seen in the seven-day Moving Average. This suggests a slowdown in interest and engagement within the MATIC network.
Historically, there has been a tight correlation between MATIC price movements and its Daily Active Addresses, particularly the seven-day Moving Average. The recent surge in prices from February 1 to March 14 can be attributed to this correlation, as the MATIC price increased by 41.77% during that period.
With the recent downturn in the Daily Active Addresses’ seven-day Moving Average, it is possible that the MATIC price may experience a correction phase in the near future. This could lead to a cooling period for MATIC’s market valuation and an adjustment in its price trajectory.
Holders Face Losses: On-Chain Metrics Signal Bearish Trend
The current situation indicates a bearish sentiment, with 51% of MATIC addresses facing losses while only 44% are in profit. This suggests that the majority of investors purchased at higher prices and are now underwater, leading to diminished buying enthusiasm and potentially stalling any upward price momentum.
Furthermore, this situation may prompt those at a loss to sell their assets as soon as prices recover. This could introduce selling pressure at certain thresholds and limit potential price growth.
The psychological impact on investor sentiment, with a majority facing losses, could foster a bearish outlook. The concern over further declines may overshadow optimism for recovery, dissuading new investments and delaying any positive price movement.
Comparing the year-to-date (YTD) growth of various cryptocurrencies, MATIC is currently at a loss. This status is only followed by ADA and XRP. With the rest of the market booming, investors may start looking for other investment opportunities with more potential return on investment, leaving MATIC behind.
MATIC Price Prediction: Is A 10% Drop Imminent?
An analysis of MATIC’s 4-hour price chart reveals that its short-term EMA lines recently crossed below long-term EMA lines, indicating a bearish trend. This suggests that recent prices are lower than the historical average, signaling a period where selling pressure outweighs buying interest.
Exponential Moving Averages (EMAs) are crucial in identifying the direction of price momentum and potential trend reversals. If the current downtrend persists, MATIC’s price could drop until the next support zone at $0.90, resulting in an almost 10% price drop. However, factors such as a surge in ETH price could reverse this trend and drive MATIC’s price upwards towards resistances at $1.10 and $1.15.
Hot Take: The Future of MATIC
The decline in Polygon (MATIC) Daily Active Addresses and the majority of holders facing losses indicate a challenging period for the cryptocurrency. However, it is important to consider that market conditions can change rapidly, and new developments may impact the price trajectory of MATIC.
Investors should closely monitor market trends, upcoming news, and any potential catalysts that could influence MATIC’s price. It is advisable to conduct thorough research and seek professional advice before making any investment decisions.
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