CoinDesk Reports:
Polygon (MATIC) has struggled to find its footing after nearly all holders lost profits. The MVRV indicator shows the token is in a bear market phase, needing a 13% increase to escape.
Following the recent market adjustment, Polygon (MATIC) has seen its situation worsen. Specifically, on July 5th, the token price plummeted to $0.43.
Long-term, MATIC hasn’t seen this level since July 2022, during an overall bearish period in the cryptocurrency market.
MATIC’s recent decline mirrors the broader market. However, in one unique aspect, it seems isolated.
Typically, it’s expected that most or at least some of the top 20 crypto holders will achieve some form of profit at some point. Is MATIC really like this?
Polygon finally exits the “green zone.”
Well, the bad news is MATIC can’t boast the same. According to IntoTheBlock data, 97% of active addresses in the project currently hold no funds. Simply put, they are holding the token at a loss.
The remaining 3% are neither profiting nor at a loss, meaning no active MATIC holders are seeing unrealized gains.
In March this year, Polygon’s native token reached an annual high of $1.27, making many holders profitable. However, since then, the altcoin’s price has been on a downward trend.
As of the time of writing, the cryptocurrency has fallen back to $0.46. However, it has not faced significant selling barriers at the $0.49 minimum price.
In this area, 550 addresses bought 20.47 million MATIC. Therefore, if the price approaches this level, investors are likely willing to sell.
If this scenario plays out, the token’s value could drop again to $0.43. However, if buying pressure increases, bulls may attempt to break this wall.
If successful, MATIC could retest $0.51 on the chart. However, at present, this possibility seems unlikely.
Will the bear stay?
Additionally, AMBCrypto evaluated whether MATIC has indeed reverted to a bear market phase. To this end, we examined the Market Value to Realized Value (MVRV) ratio.
This metric calculates the difference between the MVRV ratio of long-term holders and the MVRR ratio of newly accumulated tokens.
A positive reading indicates the token is in a bullish phase. However, if the reading is negative, it suggests a bearish phase.
For this project, the MVRV long/short spread is -13.75%, indicating MATIC is caught in bear claws. To move out of this territory, the price must rise by 13%.
Read Polygon’s (MATIC) Price Forecast 2024-2025.
If this occurs, the token may attempt to retest previous highs. However, if it fails to do so, the price could drop again.
This time, it could potentially fall to $0.40.
