According to data from IntoTheBlock, Polygon (MATIC) reached a significant point where 31,000 addresses collectively acquired 216.94 million tokens at an average price of $0.73. This price level served as a breakeven point for these holders and could potentially act as a crucial level for the MATIC token.
As of the latest data, 111,724 addresses, which represent approximately 17.34% of the total supply, are currently holding MATIC at a profit. Conversely, a staggering 501,710 addresses, equivalent to about 77.85% of the total, are currently holding MATIC at a loss.
Depending on the direction in which the Polygon native token moves next, the $0.73 region could serve either as a support level, where buying interest may increase, or as a resistance level, where selling pressure may intensify.
The key is in this cohort
A breakout above the $0.73 level for MATIC could potentially lead to a further increase towards $0.76, where approximately 36.69 million tokens were accumulated. If this scenario unfolds, the cryptocurrency's price might initiate a breakout towards $0.83.
Conversely, a breakdown below this level could trigger a decline towards $0.61, where many holders entered the market at a profit. As of the latest data, MATIC has experienced a 4.37% decrease in price over the last 24 hours.
Should MATIC maintain its current momentum, its next move could involve a rise to a price range between $0.83 and $0.89.
In addition to participant behavior, the movement of Ethereum (ETH) is also a factor that could influence the direction of MATIC. Analysis indicates a strong correlation between Polygon and ETH, with a correlation coefficient of 0.93. Similarly, the correlation between Polygon and Bitcoin (BTC) stands at 0.87.
Correlation coefficients range from -1 to +1, with readings close to -1 indicating price divergence and readings close to +1 indicating synchronized price movements between cryptocurrencies.
Therefore, if Ethereum manages to avoid dropping below $3,000, MATIC's price might rise to $0.83. Conversely, if the price of Ethereum experiences a decline, MATIC's price could start another correction towards $0.61.
According to on-chain data from Santiment, a further decrease in Polygon's token could potentially lead it into a bearish phase. The MVRV Z Score is a key metric used to assess market sentiment and price trends. When the MVRV Z Score is below zero, it indicates bearish dominance, suggesting challenges for price appreciation.
Conversely, a positive reading in the metric suggests a tendency for price appreciation. Currently, Polygon's MVRV Z Score stands at 0.19. If this reading continues to decline, it could invalidate the bullish prediction mentioned earlier.
A rapid increase in the metric could prevent MATIC from entering another challenging phase.
Therefore, traders should monitor the outcome before making any decisions. Additionally, the metric's reading could indicate that the token is undervalued. If millions of addresses begin accumulating MATIC at $0.73, it could potentially mitigate the risk of entering a bear cycle.
May 2024, Cryptoniteuae