Polygon (MATIC) Plummets To 24-Month Low

The price of MATIC, the token that powers leading Layer 2 (L2) platform Polygon, has fallen significantly since rising to a year-to-date high of $1.22 on March 14.

After trading in a range from April 14 to June 7, the stock fell below the lower limit of the horizontal channel (support level) and has since fallen 33%.

Polygon trades at 24-month low

At the time of writing, the L2 token is trading at $0.44. The last time the altcoin traded at this price was in July 2022.

An on-chain assessment of MATIC’s price performance revealed a significant decline in demand for the altcoin among market participants, based on a measurement of the divergence between the token’s price and daily active addresses (DAA).

This metric compares an asset’s price fluctuations with changes in the number of daily active addresses. It tracks whether an asset’s price movements are supported by corresponding activity on the network.

At the time of writing, MATIC’s price DAA deviation is showing a negative value of -35.59%. Incidentally, the last time this indicator exceeded zero was on October 24, 2023.

Read more: How to buy Polygon (MATIC) and everything you need to know

Polygon price vs. daily active addresses. Source: Santiment

When this indicator returns a value below zero, it indicates a decline in daily active addresses trading the asset. A value of -35.59% indicates a significant decline in the number of active addresses, which is a bearish signal for any asset.

The drop in MATIC price, combined with the negative price-DAA divergence, suggests that both the token’s price and network activity on Polygon are declining.

Moreover, MATIC’s Relative Strength Index (RSI) is at 21.17, supporting the above position. The indicator measures overbought and oversold market conditions of an asset and ranges from 0 to 100. Values ​​above 70 indicate that the asset is overbought and in need of a correction, while values ​​below 30 indicate that the asset is oversold and may be poised for a rebound.

Polygon Relative Strength Index. Source: Santiment
Polygon Relative Strength Index. Source: Santiment

MATIC’s RSI is suggesting that the price may be primed for a rise, but the significant bearish bias currently associated with it could prevent any price gains.

MATIC price forecast: Fall to multi-year lows likely to continue

The price decline of MATIC is likely to continue as the bearish trend against altcoins continues to gain momentum, with the Elder-Ray Index showing negative values ​​since the start of the decline on June 7.

This indicator measures the balance of power between buyers and sellers in the market. When the value is negative, the bears dominate the market.

At the time of writing, MATIC has an Elder-Ray Index value of -0.15.

Read more: Polygon (MATIC) Price Forecast 2024/2025/2030

Polygon Analysis
Polygon analysis. Source: Trading View

If the bears continue to dominate the market, the token’s price will be forced into a downward trend, with the price likely to fall to as low as $0.42.

However, if traders take advantage of the dip and surge in buying pressure, the price of MATIC could rise towards $0.49.

Disclaimer

In accordance with Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. While BeInCrypto strives to produce accurate and unbiased reports, market conditions may change without notice. Always conduct your own research and consult with an expert before making any financial decisions. Please note that our Terms of Use, Privacy Policy and Disclaimer have been updated.

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