Polygon Whales Buy Despite 88% MATIC Price Crash, Why?

Polygon, a layer 2 crypto, has recently experienced a downturn in its market value, mirroring broader declines across crypto markets. MATIC price reached its peak at an all-time high of $2.92 on Dec 27, 2021, before undergoing a significant correction. Over the past week, the altcoin has seen a 5% drop, attributed to overall market volatility.

Polygon Whales Increase Holdings Amidst MATIC Price Drop

Despite a downturn in Polygon price, Santiment data shows that cryptocurrency whales are seizing the opportunity to stock up on the asset. This trend could indicate their confidence in a potential future recovery or valuation increase. 

Analysis of transactions reveals heightened activity during price dips, suggesting strategic accumulation rather than panic selling among major holders.

Recent trends have shown a notable correlation between network growth and token prices, exemplified by MATIC. Observations indicate a significant decline in network activity, mirrored by a concurrent dip in MATIC’s market price. These movements suggest that user engagement and network transactions heavily influence token valuation. 

According to IntoTheBlock data, a majority of MATIC holders are facing losses. Currently, 98.44% of all addresses are out of the money. This means these investors bought their tokens at prices higher than the current price. Conversely, only 1.05% of investors are in the money. They purchased MATIC at prices lower than today’s rate, showing a profit potential. This data underlines the high volatility and speculative nature of cryptocurrency markets.

MATIC Price Forecast: Potential Dip to Support Levels

Over the past 24-hours, the cryptocurrency market has witnessed considerable volatility. As of reporting time, the MATIC price hovered at $0.4057 during European trading hours, slightly dipping 0.22% from the previous day. The daily trading session saw a high of $0.4074 and a low of $0.393, indicating fluctuation in the market.

Polygon is experiencing a downward trend; if this momentum persists, MATIC’s value may drop to a support level of $0.38. If selling pressures intensify, the price could decrease further to $0.35. 

The 4-hour technical indicators for MATIC price show a subtle market movement. The Moving Average Convergence Divergence (MACD) indicator presents a mixed signal. Although the MACD line is positioned above the signal line, both lines are close to the zero axis, suggesting a lack of strong momentum in either direction. The Relative Strength Index (RSI) is currently at 44, indicating a neutral trend.

On the upside, a breakthrough above the $0.42 resistance could indicate a potential bullish reversal. Such a move might elevate MATIC toward a critical resistance at $0.45. The layer 2 token could soar past $0.55 with sustained positive momentum.