Polygon (MATIC) price reclaimed $0.53 after the team released the long-awaited POL token migration roadmap on September 14. Will MATIC price find enough demand to sustain a continued bull run? Will it happen or will it reverse again to below $0.50?
On September 14, the Polygon team announced plans to begin the migration process from MATIC to the new POL token in Q4 2023. This news appears to have boosted confidence in the spot market among current MATIC holders and traders. This has led to a 10% increase in prices over the past week, from $0.48 to $0.53.
However, uncertainty about the token migration method has caused some hesitation among futures market traders and new market entrants.
Despite the MATIC price recovery, investors are not pouring new money into the market
Derivatives market data shows that despite a rebound from $0.48 to $0.53, MATIC open interest continued to decline over the past week. In the week from September 11 to September 18, MATIC open interest decreased by $114.08 million to $101.31 million.
The recent downtrend means that nearly $13 million has been wiped out of the MATIC futures market, despite a 10.04% price increase in that time.
Will MATIC price reverse below $0.50 or rise to $0.70; Open interest, September 2023.
Open interest represents the total number of open contracts (long and short positions) in the asset derivatives market. Essentially, it measures the change in the number of market participants and the total amount of capital trading in these positions. The downward trend in open interest is a bearish signal, indicating that investors are moving funds away from MATIC derivatives.
When it falls during a bull market, it means that investors who previously held long positions are able to profit as the price of MATIC rises, causing open interest to fall.
Decreased interest and participation in the MATIC market could also result in reduced spot market demand.
MATIC struggles to attract new users before token migration
While news of the upcoming POL token migration has boosted confidence among existing MATIC holders and spot market traders, new network participants must remain cautious. The number of new wallet addresses created on the Polygon network has dropped significantly since the migration roadmap was announced.
As shown in the chart below, Polygon recorded only 59,012 new addresses on September 17. This is a sharp drop of 65% from the peak of 168,200 addresses recorded during the previous week, from September 17 to September 8.
Network Growth, September 2023.
By tracking the number of wallet addresses created each day, network developers estimate the number of new users joining the blockchain network.
As shown above, the decline in user acquisition continued to accelerate around September 14, when the team announced its token migration roadmap. This suggests that participants were becoming increasingly cautious about purchasing MATIC tokens as the migration event approached.
To summarize, if network growth continues to decline and the futures market continues to shrink, MATIC token may find it difficult to maintain its current bullish trend.
MATIC Price Prediction: $0.50 support still at risk of being lost
Based on insights from the data points analyzed above, MATIC price might consolidate between $0.50 and $0.55 instead of entering a major breakout.
The In/Out Money around Price data illustrates the distribution of purchase prices by current investors on the Polygon network. It confirms that the MATIC price may drop slightly to $0.50 due to a drop in user conversion rates.
However, as shown in the chart below, 2,500 addresses bought 48 million MATIC at a minimum price of $0.52. If they hold reliably, they can provide important support.
However, if these efforts fail, the Polygon native token price could fall further to $0.48.
However, on the contrary, if the Polygon team can provide clear information on the token migration to attract new entrants and derivatives traders to participate, bulls may push the price increase to zero at $0.70.
However, the 4,260 addresses that bought 91.85 billion MATIC tokens at the top price of $0.56 will create significant resistance. But if this resistance falls, then MATIC could reclaim $0.70.
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【Disclaimer】The market is risky, so be cautious when investing. This article does not constitute investment advice, and users should consider whether any opinions, views or conclusions in this article are suitable for their specific circumstances. Investing based on this information is at your own risk.
