Polygon Investors Switch to Selling Mode How Will This Affect MATIC?
- MATIC, a key Layer 2 scaling solution for Ethereum, has surged 57% in the past month to $1.12.
- Polygons rally faces pressure as on-chain data shows a surge in tokens available for sale, indicating profit-taking.
- MATICs price outlook hinges on Bitcoins performance; continued BTC strength could propel MATIC above $1.18
Polygon (MATIC), one of the most prominent Layer 2 scaling solutions for Ethereum, has been on an absolute tear over the past month. Riding the coattails of Bitcoins resurgence, MATIC has posted a 57% gain in just 30 days to reach its current valuation of $1.12.
However, this upward march now faces its biggest test as MATIC investors appear primed to take profits off the table. According to on-chain analytics provider Glassnode, the supply of MATIC tokens available on exchanges has swollen by 100 million over the last 12 days to 1.2 billion.
Rising exchange reserves typically signal traders intent to sell and realize gains from rallying prices. This intent gets particularly pronounced amidst short-term speculative manias when holders rush to cash out ahead of corrections.
Worryingly, MATICs supply distribution data reveals that short-term speculators defined as addresses holding less than one month now account for 7.8% of circulating supply compared to just 3.9% two weeks ago. These traders currently hold $782 million worth of MATIC, which could rapidly hit the market.
MATIC Price Outlook Tied to Bitcoins Trajectory
With investors seemingly hitting the sell button just as MATIC nears the critical $1.18 resistance barrier, Polygons price outlook depends largely on whether Bitcoin can continue pulling the market higher. These two assets share a strongly positive 0.9 correlation, so MATIC often shadows BTCs moves.
Following Bitcoins breakout to an all-time high of $69,000, residual momentum could lift MATIC above $1.18 and target the $1.20+ range. However, any BTC pullbacks may leave Polygon struggling for support and force MATIC to fallback below the $1.05 mark to invalidate its bullish setup.
So while MATIC faces plenty of internal risks from holders distributing, external factors like Bitcoins prevailing strength may ultimately decide if this altcoin rally has the legs to reach new heights or the rug pulled beneath it from profit-seekers.
Read more: https://thenewscrypto.com/polygon-investors-switch-to-selling-mode-how-will-this-affect-matic/
Text source: TheNewsCrypto – Blockchain & Cryptocurrency News M
