Can Polygon (MATIC) Break the $0.5 Barrier Amid Bearish Pressure?

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NAIROBI (CoinChapter.com)— Polygon (MATIC) recently dropped below the $0.5 previous support level, which now serves as immediate resistance. Trading at $0.41, MATIC faces potential further declines as market sentiment remains bearish.

Coinglass Data shows a notable increase in MATIC liquidations on Aug. 6, 2024, with short positions amounting to $371.67K compared to $89.07K in long positions. This imbalance suggests a bearish sentiment, as traders anticipated further declines in MATIC’s price.

Polygon MATIC — *MATIC Exchange outflow chart. Source: CryptoQuant*

Additionally, net flow data shows outflows reaching over 13 million tokens, surpassing inflows as traders offload MATIC amidst falling prices.

Currently, Polygon (MATIC) is trading around $0.4013, reflecting a 12.34% increase since Aug. 5. This rebound follows a massive crash on Aug. 5, which impacted the entire crypto market and was triggered by volatility in the yen carry trade.

Polygon (MATIC) shows a promising trend with an increase in whale transactions, indicating rising interest among large investors. The MVRV Long/Short Difference is at -27.48%, suggesting many holders are still at a loss, which may limit immediate selling.

MATIC’s price has steadily climbed to $0.812, and this upward momentum, combined with increased whale activity, suggests a positive outlook for the asset.

Can Polygon (MATIC) Break Free from Its Bearish Grip?

As of Aug. 6, 2024, Polygon (MATIC) trades at $0.3989, marking a 3.77% increase for the day. The price remains under pressure from a descending trendline, indicating persistent bearish sentiment.

The Fibonacci retracement levels highlight key resistance zones. The price faces hurdles at $0.4814 (61.8% Fibonacci retracement) and $0.5206 (78.6% Fibonacci retracement). If MATIC breaks above these levels, it might test the psychological $0.70 mark.

The Relative Strength Index (RSI) is at 37.28, suggesting MATIC is near the oversold territory. This reading could imply a potential reversal if buying pressure increases. Meanwhile, the Moving Average Convergence Divergence (MACD) indicator shows a bearish crossover, with the MACD line below the signal line.

Support lies at $0.327, which is a crucial level for maintaining upward momentum. A break below this could trigger further declines, potentially targeting the $0.20 mark. Resistance stands firm at the trendline and the $0.48 to $0.52 range.

Polygon TVL Surges to $709M with 4.1B Transactions

In July 2024, Polygon (MATIC) ranked as the fourth-largest Ethereum scaling solution by total value locked (TVL) at $709 million, behind Arbitrum, Base, and Blast, but ahead of Optimism. Its proof-of-stake (PoS) chain processed over 4.1 billion transactions in Q2 2024.

Polygon’s average transaction fee was $0.01, a 41% decrease from the previous quarter, compared to Optimism’s Bedrock average fee of $0.06.

Despite recent price challenges, Polygon’s network activity continues to grow. Daily active addresses on its PoS chain increased by 47% quarter-over-quarter, reaching 1.2 million. The network processed 452 million DeFi transactions in the past year, valued at $1.5 billion, surpassing Arbitrum, Base, and Optimism.

Polygon’s Polymarket platform saw its TVL rise by 237% quarter-over-quarter, driven by increased betting activity ahead of the U.S. Presidential elections, underscoring its role in decentralized finance.

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