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Crypto companies and individual large investors, known as whales, can create serious fluctuations, especially in altcoins. Recently, a large amount of tokens was moved in one of the underperforming altcoins, which could lead to a price drop due to potential future sales. So, what’s the current situation? Is there a cause for concern for investors?
Polygon (MATIC)
For some time now, the number of blockchain analysis companies has been increasing, and SpotOnChain is one of them. These companies monitor blocks on large networks to find noteworthy activities and we will see their numbers and influence grow in the future. The latest alert from the company concerned Polygon (MATIC) investors.
The company announced that 3 million MATIC Coins were transferred from a wallet connected to Hermez Network, indicating an important signal as the wallet already held 16 million tokens. The transfer to the Kraken exchange points to a potential sale.
Last year, Hermez Network, an open-source Zero Knowledge Rollup, merged with Polygon. This integration led to the rebranding of Hermez as Polygon Hermez.
Transfers made by large investors to centralized exchanges often result in sales, and even more crucial is the source of this motivation. With a significant amount of tokens still in the wallet, the start of their transfer could turn into an important exit signal for MATIC Coin investors.
MATIC Coin Commentary
As of writing this article, Bitcoin‘s price is finding buyers at $51,400. The altcoin has recovered from Saturday’s drop and is turning its direction upwards, which is positive. Even though it has not broken through resistance, the reaction from the support indicates that the overall market sentiment remains strong. Specifically for MATIC Coin, the Elliot wave chart below can provide a good forecast.
“The MATIC price is in a diagonal formation, so it’s possible that the price is already in wave five. Ideally, to maintain upward pressure, the price should not fall below $0.8328.”
Although the recent transfer may give hope to the bears, there is a positive detail in the network activity data. Two days ago, Polygon saw the highest number of daily active addresses ever, with 845,350. The network, which was last this active in October 2022, has managed to increase its user count in the intervening 16 months. We should also know that since the beginning of 2024, 11 million new addresses have been created, and the total address count has exceeded 403 million.
The only problem is that despite the increase in network users, the number of transactions remains significantly below the peak of 16.4 million on November 16, 2023 (3.8 million).
