Polygon witnesses sharp decline in supply as MATIC disappears from exchanges: Crypto Insights Firm Sentiment
A leading research firm reveals that blockchain scaling solution Polygon is witnessing a dramatic drop in the supply of MATIC on crypto exchanges even after the token’s explosive rally in recent days.
In a new report, Santiment says “crowds are piling in” on Polygon as crypto exchange supply plunges from over one billion MATIC tokens in mid-October to 833.03 million coins on November 4.
“MATIC’s supply on exchanges continues to fall even as prices skyrocket, indicating that people are quite confident of further price increases.”
MATIC is in the midst of a fiery rally to start November, opening the month at $0.90 and rising as high as $1.30 for a 44% increase in less than a week.
MATIC has since rebounded and is trading at $1.17 at the time of writing.
Looking at MATIC’s other on-chain metrics, Santiment says the coin’s rally comes as Polygon sees its highest network growth in months. According to the research firm, network growth illustrates user adoption by tracking the amount of new addresses that transferred MATIC tokens for the first time.
“MATIC sees its highest network growth in months. Sustained network growth would be good, but as soon as it falls and the price continues to soar, forming a divergence, it tends to signal a local top as no new people are entering.”
With more traders jumping in and joining the rally, Santiment warns that one-chain metrics signal that MATIC may be on the verge of a corrective move. According to the research firm, the coin’s seven-day market value to realized value (MVRV) metric shows that MATIC holders are in a good position to lock in profits.
“MATIC’s MVRV 7D, which measures short-term profit/loss for holders, shows that we are now in the danger zone, with MATIC’s price decline historically shortly followed by a local top form.”
You can read the full report here.
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Featured image: Shutterstock/Mia Stendal
