The price of Polygon (MATIC) has been rejected multiple times over the past week at $0.70 amid frantic recovery efforts by the bulls. Crypto exchanges ending support for MATIC and other altcoins contributed to the recent price correction. Can the bullish investors defy the negative sentiment to sustain the Polygon Pice rally?
Robinhood will end support for MATIC, Cardano (ADA), and Solana (SOL) on June 27. The prominent crypto trading platform made the announcement on June 9 in a proactive response to the SEC’s recent lawsuits against Binance and Coinbase.
As the historic delisting date approaches, the ongoing MATIC price rally has taken a slight setback around $0.70. However, on-chain data suggests that the bulls could soon seize control of the market again.
Polygon investors have staked over 100 million tokens this month.
The FUD in the SEC market has caused the MATIC price to take a significant setback this month. But on-chain data shows that investors began to bet, rather than sell, in droves once the price fell below $0.77 on June 7.
Between June 7 and June 26, MATIC holders stake an additional 158 million tokens (1.7% of the circulating supply).
In the past year in particular, the Polygon network has seen similar spikes in staking activity with over 100 million tokens in October 2022 and January 2023. The chart below shows that the price of MATIC has increased by 70% and 93% on both occasions rose.
Delivery in smart contracts evaluates staking activity by measuring changes in the percentage of tokens currently in circulation in smart contracts.
When it rises significantly during a price correction, as shown above, it indicates that holders are less and less willing to sell. Instead, they turn to yield-bearing protocols to limit potential losses.
If the bullish trend repeats itself as it did in October 2022 and January 2023, MATIC holders can expect another rally above the $1 mark in the coming weeks.
MATIC holders move tokens from exchanges
Since the SEC filings hit the newswires, MATIX investors have increasingly withdrawn their tokens from the exchanges. While some choose long-term self-custody options, a large percentage look to passive income options to limit their losses.
The MATIC balance on exchanges has fallen to new lows in the past month. The Balance on exchanges metric tracks the total amount of a given cryptocurrency deposited in accredited crypto exchange wallets.
On June 26, 2023, it stands at 1.074 billion MATIC. The chart below shows how investors pulled approximately 161 million MATIC from the exchanges between June 9 and June 26.
Investors who take tokens from exchanges often have a positive impact on the price for a number of reasons. First, self-custody reduces the number of tokens readily available to trade on exchanges.
This drastic drop in market supply on crypto exchanges often forces buyers to compete by offering higher prices.
Second, when investors move tokens from exchange wallets to DeFi staking protocols, they help secure the network and provide much-needed liquidity to projects hosted on the blockchain.
In summary, the drop in market supply and increased stakes will likely help Polygon maintain its current bullish momentum.
MATIC Price Prediction: Is $0.75 Next Target?
Given the steady growth of Polygon staking activity, the price is likely to rise to $0.75 in the coming weeks. However, MATIC must first break above the initial resistance at $0.70.
According to IntoTheBlockAccording to the Global In/Out of The Money Around Price (GIOM) data, 2,480 investors who bought 109.81 million MATIC at the average price of $0.70 could trigger a pullback.
But if Polygon can scale up that resistance zone, it could move past the $0.75 price target.
Still, the bears could invalidate Polygon’s price rally if it unexpectedly drops below the $0.65 critical support zone. Although the 4,310 investors who bought 561.2 million tokens for an average of $0.65 are likely to avoid the drop.
However, if that support level fails to hold, MATIC could drop below $0.60 again.
In accordance with Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always do your own research and consult a professional before making any financial decisions.