- Layer-2 altcoin MATIC recently nosedived to the yearly lows, similar to 2022.
- Seasoned crypto analyst pens a bullish thesis for MATIC on one condition.
- On-chain metrics point to insufficient buy pressure despite a slight bounce.
The popular Layer-2 blockchain Polygon (MATIC) has recently dropped out of the TOP 20 by cryptoโs global market cap. Despite striking multiple deals with big names like Google, Nike, Disney, Coca-Cola, and Starbucks, MATICโs run to prominence is now overshadowed by bleak recovery efforts.
Why MATICโs Rebound Rally Didnโt Take Off
MATIC tapped the yearly bottom last week, sliding to $0.355 on August 5, 2024. This was a brutal day for the general crypto markets, as all major-cap coins witnessed a double-digit downswing. While some alts successfully rebounded a week later, Polygon remained stagnant as the consolidation phase crept in for a longer time than most holders expected.
Some experienced crypto traders have waited for this MATIC price drop. In a technical chart analysis posted by crypto analyst Endless Grind, the 2022 bear market lows are highlighted as a desirable entry point, as MATIC briefly slumped below $0.40 resistance levels on August 5 and 7, 2024, before successfully turning the $0.40 price barrier into support.
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However, several on-chain indicators point to stagnation, as MATICโs on-balance volume (OBV) dropped to two-year lows. Sliding from -369M MATIC tokens at the beginning of 2024 to -1.438B today, this negative signal depicts weak buying pressure for the altcoin. Chaikin Money Flow (CMF), another indicator used to gauge the current momentum, was also dwelling below zero on the daily crypto charts.
How Polygonโs Bullish Thesis Can Play Out
While Polygon’s 2022 yearly bottom was close to being retested on August 5, 2024, several traders interpreted the price movement as history potentially repeating itself. In 2022, MATIC tackled $1.25 in November, bouncing back from below $0.40 in just five months.
Veteran crypto analysts like Ali Martinez see the recent MATIC price drop as a perfect setup for a similar bull run โif the altcoin season kicks off.โ As MATIC might look to โmelt faces,โ Martinez warns the crypto audience that a weekly close below $0.30 would invalidate the historically based bullish thesis.
The #28 ranked alternative crypto Polygon is trading at $0.42, inking 1.2% gains over the past 24 hours. Zooming out of the daily charts, itโs evident that MATIC is still licking its wounds with a 22.3% monthly drop, as bulls couldnโt take back the steering wheel.
On the Flipside
- According to real-time data from IntoTheBlock, only 2% of current Polygon holders profit from this price.
- The Layer-2 altcoin sports a high concentration of large holders at 86%, which could induce potential centralization issues.
Why This Matters
Originally dubbed the Matic Network, Polygonโs blockchain has been among the frontrunners of global crypto adoption due to numerous deals with real-life brand names.
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