MATIC Hints at Reversal as On-Chain Activity Rises Before POL Migration

Recent Surge in On-Chain Activity

Polygon has experienced a decline since the crypto market retrace began in March. Despite this, there has been a sharp increase in on-chain activity, which could signal a potential reversal for MATIC. Santiment’s report highlights the following:

• Active addresses have increased.
• Previously dormant MATIC tokens are being transferred.
• The number of addresses interacting with the network has risen.

This surge represents the second highest increase of the year, leading to speculation about whether MATIC is poised for a turnaround. However, data from Polygonscan presents a more complex picture:

• Address activity fell from 1.6 million in late July to approximately 70,000 by the end of August, a 50% drop.
• Daily transactions decreased from about 5 million in March to around 3 million, though it peaked in late August.

Age Consumed Metric and Dormant Tokens

Despite recent price fluctuations, the increase in on-chain activity might indicate future growth for MATIC. Santiment’s Age Consumed metric, which tracks the movement of long-held tokens, has shown positive growth. This rise suggests that previously inactive tokens are becoming active again, a development historically linked to price changes.

Impact of Binance’s Decision and Security Issues

Recent developments have added to the uncertainty surrounding MATIC. Binance announced its support for Polygon’s network token migration from MATIC to POL on September 4. This move aligns with Polygon’s plans for network transformation and improvement.

Additionally, the Polygon community faced security challenges when its Discord channel was hacked on August 24. This breach, part of a larger attack on multiple blockchain projects, exposed vulnerabilities within the platform and its ecosystem.

MATIC Price Trends and Future Outlook

Despite the surge in on-chain transactions, MATIC’s price has struggled to gain momentum. On August 25, the token reached approximately $0.58, its highest level in two months, but subsequently fell by 24% to $0.437 on August 29, its lowest level in 10 days. As of the latest data, MATIC has decreased by 3% in the past 24 hours, trading at $0.43. This positions MATIC 85% below its all-time high of $2.92, achieved in December 2021.

On August 20, crypto analyst World of Charts identified an upward reversal signal for MATIC. The analyst noted that the token had surpassed a six-month descending trendline. This breakout could indicate a shift in market sentiment, with potential for MATIC’s price to climb to $1, representing a 143% increase from its current level.