For the first time since July 2022, the altcoin price dropped below $0.60 after the SEC classified it as a ‘security’ in a June 2023 court filing. Polygon developers are trying to address centralization concerns by proposing a switch from MATIC to a new POL token. Crypto expert Ibrahim Ajibade discusses how the Polygon transition will affect the markets in the coming weeks.
Polygon prepares for the big transition! Altcoin price is rising
cryptocoin.comThe price of Polygon (MATIC) fell to its 2023 low of $0.58 on June 11 after the SEC classified it as a ‘securities’ in a court filing. The Polygon team is now working to address regulatory concerns. Accordingly, it plans to switch from MATIC to a new POL token to expand its use case.
The Polygon team plans to launch a new POL token on June 13, 2023. In this regard, it has released a new Polygon 2.0 whitepaper. It outlines plans to abandon MATIC for POL to improve staking and security incentives, as well as optimization for broader decentralization and community governance. Since the Polygon 2.0 announcement went live on June 13, the price of MATIC has already gained 13%. Tokenomic modifications and discussions continue.
MATIC whales are back in action
Since news of the transition from Polygon MATIC to the POL token broke out, whales have stepped up their trading activity. The Santiment chart below is one day before the June 13 announcement. Polygon recorded only 61 Whale Transactions. However, at the close of June 18, that number rose to 112.
Whale Transaction Count aggregates daily transactions in excess of $100,000. In this way, it monitors the trading activities of institutional investors. The chart above shows that Whales are buying more even though the price has fallen marginally this week. It looks like the whales are already positioned for future staking rewards and governance benefits outlined in the Polygon MATIC to POL token migration whitepaper. If strategic individual investors also catch this accumulation wave, it is possible for the altcoin price to rise to $ 1 again in a short time.
POL token transition proposal encouraged individual user activity
On-chain data shows that the transition from Polygon MATIC to POL token triggers increased network activity among individual participants. Accordingly, on June 12, there were only 1.35 million total Active Addresses (7d) on the Polygon network. But impressively, at the close of June 19, that figure reached 1.44 million wallet addresses.
The Active Addresses (7d) metric aggregates the number of individual wallet addresses that processed the transaction over the course of seven days. Thus, it monitors real-time changes in network activity. The chart above shows Polygon network activity up 7% despite the 4% price pullback earlier this week. This type of positive divergence between price and network activity usually signals an imminent bullish reversal. Trading activity between whales and individual investors is on the rise. This indicates that the switch from Polygon MATIC to POL token will likely trigger the first bull rally.
Altcoin price prediction: It is possible for bulls to hit $1!
Considering these two critical bullish indicators above, the switch from Polygon MATIC to the POL token will likely trigger a rally towards $1. However, the bulls need to surpass the $0.85 resistance first. In this region, 54,000 investors purchased 4.14 billion MATIC at an average price of $0.85. It is possible that if they decide to take a profit, they accidentally cause a price correction. However, if the Polygon 2.0 migration gains enough momentum as predicted, MATIC price is likely to rebound the $1 milestone.
Conversely, if the crossover hype cools off early, a pullback towards $0.70 is possible. However, 16,000 investors who bought 373 million MATICs at an average price of $0.75 could block the return. However, if this support level falls short, it is possible for Polygon’s price to drop below $0.70 again.
The opinions and estimates in the article belong to the experts and are not investment advice.
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