Exclusion of MATIC from Grayscale Fund What Does It Mean for Its Price

Coin Realm Network reports:
MATIC has been removed from Grayscale’s GSCPxE fund. The decision is likely a result of the altcoin’s month-long downtrend on the charts
Grayscale Investments has announced adjustments to its fund components after the second quarter of 2024. As the world’s largest crypto asset management company, Grayscale Investments controls various components, including GSCPxE, OTCOX:GDLC, and OTCQB:DEFG. Following the second-quarter review, they updated the fund component weights for each product. CSIMarket announced this development through the X official page, reporting,
“Grayscale Investments rebalances crypto funds to meet investors’ diversified needs: $GBTC GrayscaleInvestments announces the rebalancing of crypto funds for the second quarter of 2024.”
According to the update, the GDLC token remains unchanged, with assets such as BTC, ETH, SOL, XRP, and AVAX weighted at 70.46%, 23.51%, 3.86%, 1.54%, and 0.63% respectively.
MATIC Removed from Grayscale GSCPxE
However, various adjustments were made to GSCPxE based on the Coindesk Smart Contract Platform Select ex ETH index. Adjustments included selling Polygon (MATIC) while using the proceeds to purchase existing fund components based on their weight.
Thus, MATIC was removed from the GSCPxE fund. These adjustments were made to follow current market trends while ensuring the flexibility of each asset based on its weight.
Impact of the Adjustment on MATIC’s Price
At the time of publication, MATIC had risen 8.5% in 24 hours, trading at $0.4778. Meanwhile, its market capitalization also appreciated, reaching $4 billion on the chart.
Conversely, trading volume decreased by 39.74% to $292 million in the past 24 hours. This is against the backdrop of the altcoin’s weekly price decline.
Similarly, AMBCrypto’s analysis shows that MATIC has been on the receiving end of a strong bearish trend.
Firstly, our analysis of Coinglass indicates that MATIC has passed high liquidation levels. Especially in the past six days, long position liquidations were higher, with figures such as $870,000, $1.6 million, and $1.5 million appearing consecutively.
A high rate of long position liquidations means that the price drop is contrary to investors’ expectations, forcing them to close positions.
Lastly, in terms of the Directional Movement Index, the negative index (42) is higher than the positive index at 7.6. When the DMI is set in this way, it is a bearish signal. Simply put, on the chart, selling pressure seems to outweigh demand.
Furthermore, a DAA divergence of -40.99 suggests that the price may be contrary to the activity level. This could be a sign of waning market interest, and unless user activity climbs, the price direction will be unsustainable.
Can MATIC Recover?
At the time of writing, MATIC appears to be in a bearish trend until it breaks through the 200 MA. Therefore, if this trend continues, the price could drop to $0.42.
However, if the uptick on the daily chart remains unchanged, the market may see a trend reversal and climb to the next resistance level around $0.50.