- MATIC has seen a spike in on-chain activity, with more active addresses and dormant tokens coming back into circulation.
- Despite this increase, MATIC’s price remains down 85% from its all-time high, struggling in the bear market.
Polygon’s native token, MATIC, faces significant price challenges despite a recent surge in on-chain activity. Some analysts believe that the growing network activity could be a sign of a reversal, but the token’s market situation remains bleak. As reported by blockchain analytics firm Santiment on August 28, activity on Polygon had risen sharply.
Polygon has been among the many networks declining since crypto’s retrace began back in March. However, a notable spike in on-chain activity may be a sign that a MATIC reversal may be brewing soon. Active addresses and dormant coin spikes are common signals preceding this. pic.twitter.com/RY5NXe10ZW
— Santiment (@santimentfeed) August 28, 2024
This rise also involves a significant transfer of previously inactive MATIC tokens and an increase in the number of addresses interacting with the network. This surge is the second highest of the year, raising questions as to whether there is going to be a reversal in the token’s current downward trend.
Overall, however, the data paints a somewhat more complex picture. According to Polygonscan data, the address activity has reduced tremendously from 1.6 million in the last week of July to approximately 70,000 by the end of August, a 50% drop. Likewise, the number of daily transactions has reduced to about 3 million from 5 million in March. It reached its peak in late August. These numbers illustrate MATIC’s struggles, although on-chain metrics indicate that the network is far from dead.
Age Consumed Metric Signals Dormant Tokens Becoming Active
However, the increase in on-chain activity observed despite the recent price fluctuations could indicate future growth for MATIC. According to Santiment’s Age Consumed metric, which measures the movement of tokens held for a long time, there has been growth. This rise suggests that there are tokens that were previously inactive but have become active, a development that has in the past pointed to changes in the price of the token.
The uncertainty of MATIC was also fueled by recent Binance’s decision to support Polygon’s network token migration from MATIC to POL-on September 4. This is in line with Polygon’s plans to transform its network additionally and for the higher.
However, the Polygon community has also had its own issues, with its Discord channel being hacked on August 24 as part of a mass attack. The breach was across several blockchain projects, making the platform and its ecosystem vulnerable to attacks.
MATIC Price Fails to Sustain Recent Gains
However, the price of MATIC has failed to pick up the pace even after a noticeable increase in on-chain transactions. On August 25, the token surged to about $0.58, its highest level in two months, but then declined 24% to $0.437 on August 29, its lowest level in 10 days. In the last 24 hours, MATIC has decreased by 3%, trading at $0.43. The current price levels put MATIC at 85%, down from its all-time high of $2.92, registered in December 2021.
On August 20, crypto analyst World of Charts pointed to an upward reversal signal for MATIC, pointing out that the token had surmounted a six-month descending trendline. As stated by the analyst, this breakout could be indicative of a change in market sentiment and the price of MATIC may climb to $1, an increase of 143% from the current price.
$Matic#Matic Testing Crucial Area Breakout Can Lead Massive Recovery In Towards 1$ In Coming Days https://t.co/OBmVBDLeFh pic.twitter.com/bpMsLrIe4t
— World Of Charts (@WorldOfCharts1) August 21, 2024
