Over the last 10 trading days, Polygon (MATIC) price has remained rooted below the $0.60 territory. On-chain indicators explore how MATIC price could react positively to a recent X (Twitter) update from Co-Founder Sandeep Nailwal.
On August 28, Polygon Co-Founder Sandeep Nailwal issued an update on the proposed migration MATIC to a new POL Token. Notably, Sandeep explained how users can easily migrate to POL without losing rewards on MATIC that are currently staked.
After months of uncertainty that followed the Polygon 2.0 tokenomics announcement in July 2023, can this update improve investor confidence and boost network activity in the coming days?
A Further Increase in Polygon Network Activity Could Trigger a Price Rebound
Since the August 17 altcoin market crash, MATIC’s price has remained rooted below $0.60. However, a critical look at the underlying on-chain data shows that Polygon’s economic activity is now returning to its usual levels.
On August 20, the Polygon network recorded 182,370 Active Addresses, its lowest since May 7, 2023. But as of August 28, it has now reached 238,690 Active Addresses, edging closer to levels recorded before the August 17 flash crash.
How Will Polygon (MATIC) Price React | Daily Active Addresses, Aug 2023, Source: Santiment
The Active Addresses metric aggregates the daily number of individual wallet addresses carrying out transactions. Typically, a persistent increase in Daily Active Addresses often results in increased market demand as more users acquire units of the native token to perform transactions.
Notably, the chart above shows that despite the 20% price retracement from August 15, MATIC network activity has actually increased by 30%. Such a positive divergence between price and network participation often indicates an imminent bullish reversal.
Furthermore, the recent “POL token” update provided by Sandeep could boost MATIC holders’ confidence and further increase network activity in the coming days.
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Negative Social Sentiment Could Drive a Trend Reversal
After weeks in the doldrums, social sentiment surrounding MATIC price has recently flipped negative. According to data culled from Santiment, MATIC Weighted Sentiment began to trend downward around August 25. As of August 28, it currently sits around -0.55.
How Will Polygon (MATIC) Price React | Weighted Sentiment, Aug 2023, Source: Santiment
The Weighted Sentiment metric evaluates the overall mood surrounding a particular blockchain community. It compares the number of positive comments about the project to the negatives.
When Weighted Sentiment drops in the negative zone during a price correction, strategic investors could interpret it as the perfect time to swoop in to buy the dip. If this premise holds, investors buying the dip could increase MATIC’s price.
In conclusion, the Polygon Co-founder’s recent update could flip the negative sentiment surrounding MATIC and inadvertently drive MATIC’s price into recovery mode.
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MATIC Price Prediction: Potential Bullish Rebound Above $0.60
Despite the prevailing negative sentiment, the key indicators analyzed above could see MATIC’s price reclaim the $0.60 territory.
The In/Out of Money Around Price data, which depicts the purchase price distribution of the current Polygon investors, also supports this prediction.
However, it highlights that 4,320 addresses had bought 24.8 million MATIC tokens around the average price of 0f $0.58. They could pose considerable resistance if they sell early.
But if the Polygon co-founder’s update intensifies network activity as predicted, the bulls will likely reclaim $0.60.
Polygon (MATIC) Price Prediction | IOMAP data, Aug 2023 | Source: IntoTheBlock
Yet, if the market FUD grows, the bears could remain in control and force a move below $0.50. Although 2,680 addresses had bought 16.7 million MATIC at the average price of $0.55. If they HODL, MATIC’s price will likely rebound.
But if that support level caves, Polygon price could eventually drop below $0.50.