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The cryptocurrency market showed positive developments this Wednesday, Bitcoin advanced above $64,000 and this situation also had a positive influence on Polygon (MATIC).

Notably, the surge came after the release of the U.S. Consumer Price Index (CPI) data that showed a 3.4% drop on a year-on-year basis which is certainly positive news.

Traders are now anticipating a faster pace of rate cuts following the most recent CPI data and it is also important to mention that the trading volume on the crypto market has increased nearly 10% in the past day. But where is the price of MATIC going next, and what can we expect from the rest of May 2024?

Today, Crypto Lists will discuss Polygon (MATIC) price estimates from a technical and fundamental analysis perspective.

Please note that there are also many other factors to consider when entering a position, such as your time horizon, willingness to risk, and how much margin you have if trading with leverage.

Polygon has experienced a fall in active addresses

Polygon is a popular Layer 2 scaling solution for the Ethereum network that relies on sidechains for achieving faster and cheaper transactions. The current blockchain ecosystem is not prepared to scale to match the demands of end-user applications with mass adoption; transactions are usually very slow and have very limited throughput.

Numerous blockchain protocols impose restrictions on block size, whereas smart contract platforms commonly make trade-offs in decentralization to enhance transaction speeds. It’s crucial to note that Polygon addresses challenges linked to blockchains and is dedicated to enhancing the accessibility of decentralized finance (DeFi) for a broader user base.

MATIC is the native utility token of the Polygon, and it is used for various purposes, including staking, participating in the network’s governance, and paying transaction fees. The last several weeks have been very negative for MATIC, and the price of this crypto lost more than 50% of its value since March 13, 2024.

The decline in the MATIC’s price is attributable to the consistent decrease in demand over the past few weeks. Another disheartening information is that MATIC Network Growth, which tracks the daily number of new addresses created to trade MATIC, also had a negative trend since April 20.

When the network activity of an asset declines, it signifies a reduction in the number of market participants engaging in buying and selling activities, leading to decreased trading volume.

Rating: 9.5/10
Supply: 7,081,679,872 / 10,000,000,000
Release date: October 11, 2017

Description: Discover Polygon and be part of the cryptocurrency revolution.

Risk warning: Trading, buying or selling crypto currencies is extremely risky and not for everyone. Do not risk money that you could not afford to loose.


Bears continue to control the price movement

With fewer traders active in the market, the market becomes less liquid, putting bearish pressure on the asset’s price. It is important to say that only last week, addresses that hold between 1 million and 10 million MATIC sold off over 21 million MATIC. Since Polygon whales dominate a considerable portion of the supply, their actions impact the price. Accumulation induces recovery and rally while selling leads to a drop in prices.

However, it’s not only the Polygon whales but also retail investors are taking a step back. This retreat is evident in the significant drop in transaction volume, as MATIC holders are refraining from active participation until they perceive an incentive to do so. In recent weeks, the average transaction volume has plummeted from $77 million to $21 million.

On the other side, positive information is that the U.S. Consumer Price Index (CPI) data showed a 3.4% drop on a year-on-year basis this Wednesday which lifted optimism on the cryptocurrency market. Bitcoin advanced above $64,000 which also had a positive influence on Polygon (MATIC) but traders should keep in mind that the risk of another decline for MATIC is still not over.

Some crypto analysts think that Bitcoin could weaken again below $60,000 in the weeks ahead, and when the price of Bitcoin drops, that usually has a negative influence on the price of MATIC and on the rest of the cryptocurrency market.

In the weeks to come, Polygon (MATIC) will remain significantly influenced by the general situation in the cryptocurrency market and investors should keep in mind that while positive developments can trigger substantial price increases, they also carry potential risks.

Technical analysis for Polygon (MATIC)

Polygon (MATIC) has weakened from $1.29 to $0.59 since March 13, 2024, and the current price stands at $0.67. The decline in the MATIC’s price is attributable to the consistent decrease in demand over the past few weeks and despite a current jump, bears continue to control the price movement.

MATIC might have a hard time holding above the $0.65 level in the upcoming days, and a break below this level would indicate that MATIC could probably test again the price level at $0.60.

Technical analysis for Polygon (MATIC)

Important support & resistance levels for Polygon (MATIC)

Important support & resistance levels for Polygon (MATIC)

On this chart (the period from December 2023), I marked important support and resistance levels that can help traders understand where the price could move. MATIC has collapsed from its recent highs, but if the price jumps above $0.80, the next target could be resistance that stands at $1. The current important level is $0.60, and if the price breaks this level again, it would be a “SELL” signal, and we have the open way to $0.50.

What speaks for the rise in the Polygon (MATIC) price

Polygon (MATIC) is a promising project that could have a bright future, and the MATIC coin will likely continue to play a significant role in the cryptocurrency market. Positive information is that the U.S. Consumer Price Index (CPI) data showed a 3.4% drop on a year-on-year basis this Wednesday which lifted optimism on the cryptocurrency market.

The overall sentiment on the cryptocurrency market plays a very important role in MATIC’s price trajectory, and if investors improve their confidence further, an upside potential could benefit MATIC. For the bulls to take again control of price movement, a move above $0.80 would be beneficial.

What indicates the downfall of Polygon (MATIC)

The downfall of MATIC can be influenced by a wide range of other factors, including market sentiment, regulatory developments, technological issues, and macroeconomic trends.

The recent decline in MATIC’s price is attributable to the consistent decrease in demand over the past few weeks. Another disheartening information is that MATIC Network Growth, which tracks the daily number of new addresses created to trade MATIC, also had a negative trend since April 20.

What do analysts and experts say?

The cryptocurrency market showed positive developments this Wednesday, Bitcoin advanced above $64,000 and this situation also had a positive influence on Polygon (MATIC). This upward movement followed the release of the U.S. Consumer Price Index (CPI) data, revealing a promising 3.4% year-on-year decline, adding to the optimistic sentiment.

However, many crypto analysts agree that the significant decrease in demand over the past few weeks will continue to influence MATIC. Another negative fact is that MATIC Network Growth, which tracks the daily number of new addresses created to trade MATIC, also had a negative trend since April 20. At the same time, some cryptocurrency analysts speculate that Bitcoin might dip below $60,000 again in the coming weeks. Historically, when Bitcoin’s price declines, it typically exerts downward pressure on MATIC and the broader cryptocurrency market.

Disclaimer: Crypto is extremely volatile and not suitable for everyone to invest in. Never speculate with money that you cannot afford to lose. The information on this site is presented for educational purposes only and should not be construed as investment or financial advice.

by Our Certified Author
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