Polygon On-Chain Activity Lights Up: MATIC Reversal Incoming?
On-chain data shows that some activity metrics related to Polygon have surged recently, which could be positive for the assets price.
Polygon Active Addresses & Age Consumed Have Spiked Recently
In a new post on X, the on-chain analytics firm Santiment discussed the latest trend in two MATIC indicators. The first is the Daily Active Addresses, which tracks the total number of addresses participating in some kind of transaction activity on the network every day.
The unique number of active addresses can be considered the same as the unique number of users participating in network activities, so the value of this metric tells us about the amount of traffic that the blockchain is observing right now.
When the indicators value rises, more users are becoming active on the network. Such a trend implies that cryptocurrency is attractive to investors.
On the other hand, the metric registering a decline suggests investor interest in the asset could be declining as fewer users make transfers on the blockchain.
Now, here is a chart that shows the trend in the Daily Active Addresses for Polygon over the past few months:
The above graph shows that the Polygon Daily Active Addresses has recently experienced a surge. At the peak of the latest spike, 3,369 MATIC addresses made transactions on the network, the second-highest value for the year.
Thus, investors appear to have been actively engaged on the network recently. It can generally be hard to say what the consequences of such activity may be for the asset, as both selling and buying activity would be flagged up in the indicator.
One thing that can generally be said is that high user activity may lead to cryptocurrency volatility. In the current case, though, there may be one other hint: the surrounding price action.
Interestingly, the largest spike in the indicator only came just after MATICs latest price decline, which could imply that investors may be rushing to buy the dip. If this is the case, then Polygon could benefit from a turnaround in the activity.
The second indicator in the chart is the Age Consumed, which tells us whether dormant coins are on the move. From the chart, its visible that a large number of old tokens appear to have moved on the network during the latest activity rush.
This can be a mixed signal, as it could suggest that the assets diamond hands are selling. Its also possible that these investors have only shifted the coins for some other activity, as the last Age Consumed spike of a similar scale proved bullish for Polygon.
Given the spikes these on-chain indicators have witnessed, how the coin develops from here remains to be seen.
MATIC Price
Polygons price has plunged almost 17% over the past week to $0.43.
Read more: https://www.newsbtc.com/news/matic/polygon-activity-matic-reversal-incoming/
Text source: NewsBTC
