Crypto Analysis: MATIC Price Prospects Amidst Growing Retail Market and Whale Investor Clash

Crypto Analysis: MATIC Price Prospects Amidst Growing Retail Market and Whale Investor Clash

Crypto News – The price of Polygon’s MATIC token successfully recovered from its losses in September, surging back to the $0.60 mark on a recent Monday. In this analysis, we delve into the on-chain data to explore how the ongoing struggle between the burgeoning retail market and Polygon’s whale investors might influence the future price movements of MATIC.

Governance Council Sparks MATIC Price Surge: Over the weekend, MATIC’s price experienced a substantial double-digit rally following the unveiling of a new governance protocol council by the Polygon team on a Thursday. The key question at this juncture is whether the influx of new participants in the market can offset the persistent selling pressure from the whale investors.

Polygon’s Attraction for Users

In September, Polygon Network initiated a transition from MATIC to a new POL token, a significant move as part of the proposed Polygon 2.0 upgrade. Alongside this, the team introduced a Governance Council to oversee the development of critical protocol projects related to the new POL token.

Record Increase in Polygon Users

The release of the POL token emphasized decentralization, which garnered significant attention within the crypto community. The inclusion of 13 contributors on the governance protocol council, noted for their diversity, social influence, and technical expertise, has instilled confidence in the Polygon network. This was evident when Polygon attracted a remarkable influx of new users within a mere 24 hours of the Governance Council announcement.

Impact on MATIC Price

Santiment’s Network Growth chart reflects the creation of 137,650 new MATIC addresses on October 20. This uptick in network growth can often translate to heightened demand for the underlying token. Notably, the surge in new MATIC wallet addresses coincided with the announcement of the Governance Council on October 19, contributing to a 25% price rally for MATIC between October 19 and 23.

Whale Investors Unfazed

Surprisingly, despite the positive developments surrounding Polygon’s transition to the POL token, on-chain data indicates that whale investors (those holding between 1 million to 1 billion MATIC) on the Polygon network remain unimpressed. The Santiment chart clearly shows that these whales have persistently engaged in a selling spree for the past two months, even as MATIC experienced a price breakout over the weekend.

Whale Wallet Balances Depletion

This selling trend initiated around September 5 when these whale investors collectively held 560.05 million MATIC. In the subsequent two months, they reduced their holdings by 50 million MATIC tokens, dwindling to 510.48 million as of October 23. Such a sustained decrease in holdings by large institutional investors typically exerts downward pressure on the token’s price.

Critical MATIC Price Juncture

Despite the recent 25% price gain, the prevailing question is whether MATIC’s price can surge beyond $0.70 without substantial participation from the whale investors. The Global In/Out of the Money data, which groups MATIC holders by their entry prices, indicates a notable resistance point at $0.65, with 4,510 addresses holding 141.9 million MATIC tokens at that level.

Outlook for MATIC Price

In conclusion, MATIC’s future price trajectory hinges on the interaction between the burgeoning retail market, buoyed by the Governance Council’s announcement, and the reticent whale investors. If the new participants can breach the $0.65 resistance point, it could propel MATIC’s price toward $0.75, a level not seen since July 2023. Conversely, if bearish whale investors aim for a reversal, support at $0.56, where 8,620 addresses hold 211.01 million MATIC, could serve as a potential rebound point. A breach of this support level may lead to a swift decline in MATIC’s price, potentially falling to $0.50.