As we move deeper into 2023, Polygon’s network activity has seen an uptick, albeit still less than its peak earlier this year. This comes amidst a period where its native token, MATIC, has been experiencing a downturn, with a 1% drop and predominantly bearish metrics. However, the recent revival in Polygon’s network activity could potentially signal a recovery phase for MATIC.
The Revival of Polygon’s Network Activity
When a blockchain’s network activity decreases, it’s a clear indication that it’s not being utilized to its fullest potential. Recently, Polygon’s network activity has shown signs of rebounding. According to a tweet from Today In Polygon, the number of daily active addresses on the blockchain has risen by 10% in the past week. This is a positive sign as it indicates an influx of new users to the network.
Alongside the increase in active users, the number of transactions on the blockchain has also followed a similar upward trend. Today In Polygon reported a 9.1% increase in daily transactions over the last week. Despite these positive signs, it’s important to note that these metrics are still far from their highs at the beginning of the year.
The Struggles of MATIC
While the network shows signs of recovery, the same cannot be said for its native token, MATIC. According to CoinMarketCap, MATIC’s price has fallen by more than 1% over the past week, with its current trading price at $0.5216 and a market capitalization exceeding $4.8 billion.
Investigating the metrics, one of the worrying signs is the slight drop in Polygon’s supply held by top addresses, implying a lack of confidence among major holders. Additionally, MATIC’s Open Interest has been on the rise as the token’s price continues to fall. However, it’s not all doom and gloom for MATIC, as its velocity remains high, indicating frequent use in transactions within a certain time frame.
Future Predictions
Investors may have to brace for more negative price action in the coming days. This is suggested by Polygon’s Relative Strength Index (RSI) and Chaikin Money Flow (CMF) both showing a sideways trend. Nevertheless, there’s a glimmer of hope as the Moving Average Convergence Divergence (MACD) hints at a bullish edge in the market.
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