MATIC Investors' concerns about prices have intensified amid the downturn in the cryptocurrency market
The price of Polygon has fallen by 11% in the past seven days.
Network growth has declined for three consecutive months.
Under current cryptocurrency market conditions, MATIC may fall to $1.
Polygonal network does not grow
Polygon is a Tier 2 expansion solution designed to alleviate Ethereum's throughput issues and high gasoline costs. The successful transition of Ethereum from proof of work (PoW) to proof of entitlement (PoS) seems to have raised concerns about the long-term viability of the Polygon ecosystem.
According to on-chain data from Glassnode, the number of new addresses created on the Polygon network has steadily decreased since December 2022. The recent announcement of a Shanghai upgrade on April 12th seems to have exacerbated the downward trend.
After the recovery in early March, the new daily address created on the Polygon blockchain entered another downward trend on March 17, a few days after the Shanghai upgrade date was announced.
In fact, as of March 21, the daily number of new addresses on the Polygon network has decreased by 32% from the local high of 1960 addresses created on February 17 to 1318 addresses.
Polygon (MATIC) Price and New Wallet Address, March 2023
The decrease in the number of new addresses on blockchain networks indicates a decrease in interest in their core services and use cases. Therefore, it may be difficult to find new demand for basic tokens.
Similarly, the crypto whales seem to have been spooked. According to data from Santiment, addresses that hold between 10 million and 100 million MATIC tokens have sold or reallocated approximately 43 million MATICs in the past month, valued at approximately $55.9 million.
Polygon (Matic) Prices and Whale Events, March 2023
From February 22 to March 21, the reserve of this group of cryptocurrency whales decreased from 253 million to 211 million. It is worth noting that a closer look at the chart shows that the buying and selling patterns of cryptocurrency investors who hold between 10 million and 100 million MATICs are closely related to prices.
MATIC Price Forecast: Potential fall below $1
IntoTheBlock's exchange market depth model provides data driven estimates of potential MATIC price movements in the coming weeks. It is an isolated collection of limit orders from token holders. It describes key support and resistance areas for current prices.
The current bearish trend may stop at 5% below current prices. This fell to $103, a huge demand for 3.5 billion MATICs.
However, if this demand barrier is not maintained, the price of Polygon may decline to $90, which is a buying barrier for another 1.2 billion MATICs.
Polygon (MATIC) Exchange Market Depth, March 2023
On the contrary, MATIC must break through $114, or 138 million tokens for sale, to invalidate the pessimistic outlook. After that, the selling barrier of 1.35 billion MATIC at $1.30 will be the next resistance to overcome.