In contrast to trends observed in other groups, Polygon (MATIC) addresses holding between 100 million to 1 billion tokens have seen an increase in their balance, according to data from Santiment. Initially reported at 16.17% on May 23rd, the supply held by this cohort has now risen to 17.30%.
This uptick suggests growing confidence in the token's long-term potential. However, it also raises the possibility of short-term price fluctuations. If whales, as this group is commonly referred to, opt to distribute a significant portion of their holdings, it could lead to a decrease in MATIC's price.
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Source: Santiment
Conversely, the increased balance has the potential to drive Polygon's price upward. At the time of reporting, the token was priced at $0.72, marking a 25.48% decline over the past 90 days. Despite this, MATIC has shown attempts to trend higher over the last month, albeit facing resistance around the $0.80 mark.
With the recent accumulation, there's optimism for Polygon's native token to make gains. To assess this potential, other metrics and indicators were examined for corroboration. Liquidation levels, for instance, were scrutinized to gauge possible price movements.
These levels signify price points where a cryptocurrency has substantial liquidity. Currently, on the Polygon chart, high liquidity is observed between $0.75 and $0.78, indicating a magnetic zone where the token might gravitate towards in the near future.
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How Liquidation Levels Impact Polygon's Price Movement
The Cumulative Liquidation Levels Delta (CLLD), depicted on the same chart, provided further validation of this prediction. This indicator measures the disparity between long and short liquidations.
Positive readings signify a higher number of long liquidations compared to shorts, while negative readings indicate the opposite. Additionally, the CLLD has an impact on price action.
Source: Hyblock Capital
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Currently, it registers a negative value, suggesting the potential for a sharp recovery in Polygon's price. Late short positions attempting to capitalize on the downturn might face repercussions.
Source: Santiment
Moreover, the Mean Dollar Invested Age (MDIA) revealed a prevailing inclination among participants to HODL MATIC. This metric reflects the average duration for which all current Polygon addresses have held their tokens.
A decline in the Mean Dollar Invested Age (MDIA) typically suggests heightened transaction activity, which can sometimes contribute to selling pressure. Currently, the 90-day MDIA has observed an increase.
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Historically, when this metric has shown consistent movement, MATIC has experienced significant price appreciation, such as going from $0.71 to $1.27. While a similar outcome might not be guaranteed this time, it's plausible that the token's price could approach or exceed $1 in the medium term.
See more: Cryptocurrency Prices and Market Cap
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