2023-7-20 16:30 |
Polygon (MATIC) price dropped to a 2023 bottom of $0.58 on June 11 after the SEC classified it a ‘security’ in a court filing. The Polygon team now looks to migrate from MATIC to a new POL token to address regulatory concerns and expand utility.
On June 13, 2023, the Polygon team published a new Polygon 2.0 whitepaper, proposing plans to launch a new POL token. It outlines plans to jettison MATIC for POL to optimize for broader decentralization and community governance while also improving staking and security incentives.
MATIC price has already gained 13% since the Polygon 2.0 announcement was published on June 13. As the tokenomics modifications and discussions pan out, here’s how the Polygon MATIC to POL token transition could move the markets in the coming weeks.
MATIC Whales Have Sprung Back Into ActionSince the Polygon MATIC to POL token transition hit the newswires, whale investors have increased their trading activity. The Santiment chart below shows that a day before June 13 announcement. Polygon only recorded 61 Whale Transactions. However, at the close of June 18, it rose to 112.
Polygon MATIC to POL Token | Whale Transactions Count, July 2023. Source: SantimentWhale Transaction Count tracks the trading activity of institutional investors by aggregating daily transactions that exceed $100,000.
The chart above shows that while the price has dropped marginally this week, the Whales have made more purchases. It appears that the whales are already positioned for the future staking rewards and governance benefits outlined in the Polygon MATIC to POL token transition whitepaper.
If the strategic retail investors also catch up to this accumulation wave, MATIC’s price could soon reclaim $1 again.
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The POL Token Transition Proposal Has Spurred Retail User ActivityFurthermore, on-chain data shows that Polygon MATIC to POL token transition has sparked increased network activity among retail participants.
Indicatively, on June 12, only 1.35 million total Active Addresses (7d) were on the Polygon network. But impressively, by the close of June 19, it had reached 1.44 million wallet addresses.
Polygon MATIC to POL Token | Active Addresses, July 2023. Source: SantimentThe Active Addresses (7d) metric tracks real-time changes in network activity by aggregating the number of individual wallet addresses carrying out the transaction over seven days.
The chart above shows that despite the 4% price retracement earlier this week, Polygon network activity has increased by 7%. Such positive divergence between price and network activity often indicates an imminent bullish reversal.
The increasing transactional activity between whales and retail investors suggests that the Polygon MATIC to POL token transition could trigger an initial bull rally.
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MATIC Price Prediction: Bulls Could Shoot for $1Considering these two critical bullish indicators highlighted above, the Polygon MATIC to POL token migration will likely trigger a rally toward $1.
But first, the bulls must scale the $0.85 resistance. At that territory, 54,000 investors had purchased 4.14 billion MATIC at an average price of $0.85. They could inadvertently cause a price correction if they decide to take profits.
However, if the Polygon 2.0 migration garners sufficient momentum as predicted, MATIC price could reclaim the $1 milestone.
Polygon (MATIC) Price Prediction| GIOM data, July 2023. Source: IntoTheBlockConversely, if the Polygon MATIC to POL token migration hype cools off prematurely, the MATIC price could retrace toward $0.70. However, the 16,000 investors that bought 373 million MATIC at the average price of $0.75 could prevent the reversal.
But if that support level falls short, Polygon’s price could end up below $0.70 again.
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The post Polygon (MATIC) Prepares for Token Migration Amid SEC Scrutiny: Price Implications? appeared first on BeInCrypto.
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