Polygon (MATIC) price sank 8% on Thursday after the Fed’s Rate pause announcement triggered another wave of sell-offs. With whale investors now losing confidence, what are the chances of a MATIC price recovery in the coming weeks?
Polygon (MATIC) price has continued its June free fall with another 8% correction on Thursday. Are there hopes of an early recovery as Polygon network on-chain data flashes multiple red signals?
MATIC Whales are Taking Bearish Positions
After last week’s price correction, crypto whales took advantage of the low prices to accumulate more MATIC. However, things have taken a different turn this week.
Since June 10, Large Transactions across the Polygon network have been dropping persistently. More specifically, between June 10 and June 15, Polygon’s large transactions have reduced by 220% from 289 to 90 transactions.
The Large Transactions metric tracks the trading activity of whale investors in real time. It sums up the number of daily confirmed transactions that exceed $100,000.
Typically, whale trading activity positively correlates to price largely due to the market liquidity they provide and their sheer buying power.
The current trend indicates that large institutional investors could be losing confidence in MATIC’s price recovery prospects.
Polygon Network Appears Overvalued Despite Price Correction
Furthermore, Polygon’s Network Valuation to Transaction Volume (NVT) ratio has increased significantly. This suggests more bearish days ahead for MATIC price. The NVT ratio compares a network’s market valuation to how much the volume of transactions involving its native token.
According to the Glassnode chart below, the MATIC NVT ratio has been rising since June 10. And between June 10 and June 15, it soared nearly 420% from 15.79 to 84.56.
The NVT ratio assesses the relationship between a cryptocurrency’s market capitalization and the level of underlying transactional activity. When it rises, as seen above, it indicates that the asset is currently overvalued.
Hence, this adds credence to the growing bearish concerns among whale investors that MATIC price recovery chances are currently slim.
MATIC Price Prediction: Further Downswing Below $0.50
The bearish mood among the whale investors suggests that the MATIC price will likely drop toward $0.50. But, according to IntoTheBlock’s In/Out of the Money Price (IOMAP) distribution data, the MATIC will likely experience bullish support around $0.60.
At the zone, there’s a buy-wall mounted by 3,800 addresses that bought 4.49 billion MATIC coins at an average price of $0.59.
If that support caves as expected, then the MATIC price will likely slump further toward $0.50.
Still, the bulls can negate this pessimistic narrative if MATIC breaks below $0.65. But as seen above, some 4,340 investors that purchased 137.6 million coins at the maximum price of $0.65 could resist.
But if that resistance level does not hold, the bulls can push the MATIC recovery toward $0.70.
In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.