Historical Context and Investor Activity
With historical context, the rise in supply held by large investors may echo previous rallies. Increased Invested Age and other metrics suggested that most MATIC holders were opting to HODL. High areas of liquidity existed between $0.75 and $0.78, indicating that the price could move towards these zones.
Contrary to trends observed in other groups, Polygon [MATIC] addresses holding 100 million to 1 billion tokens have increased their balances. According to data provided by Santiment, the supply held by this cohort was 16.17% on the 23rd of May. As of this writing, the percentage had increased to 17.30%.
Increasing Confidence and Potential Impacts
This increase denotes increasing confidence in the long-term potential of the token. However, it could also impact MATIC’s price action in the short term. For instance, if whales (the term for the group mentioned) decide to distribute a large part of their holdings, the token involved could experience a price decrease.
Therefore, the increase in balance has the potential to drive Polygon’s price higher. At press time, the price of the token was $0.72, marking a 25.48% decline in the last 90 days. However, MATIC has been attempting to trade higher within the last month, though every attempt to surpass the $0.80 resistance has been met with rejection. With recent accumulation, it could be possible for the Polygon native token to climb higher.
Analysis of Metrics and Indicators
Regarding this potential, AMBCrypto evaluated other metrics and indicators to see if they agreed. One of the indicators examined was the liquidation levels, which show the price levels a cryptocurrency can reach by highlighting high areas of liquidity. As of this writing, high liquidity on the Polygon chart existed between $0.75 and $0.78, indicating that the token might soon start moving in that direction.
Cumulative Liquidation Levels Delta (CLLD)
The Cumulative Liquidation Levels Delta (CLLD) validated this prediction. For context, the CLLD shows the difference between long and short liquidations. Positive readings of the indicator suggest more long liquidations than shorts, whereas a negative reading indicates more short liquidations than longs. Currently, the indicator was negative, suggesting that a sharp recovery could be close, potentially punishing late shorts trying to catch the dip.
Mean Dollar Invested Age (MDIA)
Furthermore, the Mean Dollar Invested Age (MDIA) indicated that most participants had leaned toward HODLing MATIC. The metric shows the average time all current Polygon addresses have held their tokens. If the reading of the MDIA decreases, it indicates increasing transaction activity, which can sometimes fuel selling pressure. At press time, the 90-day MDIA had increased.
The last time this metric made such a consistent move, MATIC went from $0.71 to $1.27. While this might not be the same case this time, the price of the token might close in on or surpass $1 in the midterm.