- Polygon (MATIC) has turned downward again.
- The price decline is due to an overall market correction.
- The asset may still have room to fall before reversing.
MATIC, the native token of the Polygon PoS blockchain, has been in the spotlight again after a 30% surge last week. The surge signaled the beginning of a massive recovery after months of doldrums, but observers are left with a moment of reflection as the asset price has now given up most of its gains and fallen below key psychological levels.
Where do you think MATIC will go in the future?
Polygon (MATIC) Tank 11%
Polygon’s MATIC is back in the red. The asset has fallen back below $0.5 and is trading near the $0.45 level at the time of writing, down more than 11% in the last 24 hours. CoinMarketCap data.
The MATIC price correction follows a broader market correction that has seen Bitcoin (BTC) and Ethereum (ETH) lose 5.6% and 7.9% respectively over the last 24 hours, with BTC once again trading below the $60,000 range at the time of writing.
In conversation DailycoinJames Butterfill, head of research at CoinShares, said the recent market correction is due to over-sensitivity to monetary policy.
“The markets are hyper sensitive (sic) to monetary policy so it is likely the stronger than expected durable goods orders data likely played into this minor correction. Potentially the Telegram arrest has played a minor role, but I would classify the market as being rangebound covering a wide range over the last few weeks due to the hypersensitivity around FED rates,” he wrote.
Regardless of the catalyst, Coinglass Data shows that $330 million worth of cryptocurrency positions have been liquidated.
Is a Polygon (MATIC) rebound possible?
Following the recent market correction, the price of MATIC appears to be retesting the downtrend line that was broken in the past few months, which could suggest more room to fall. However, before this retest, the asset was able to find support around the $0.43 level, which previously acted as a resistance level.
Source: TradingView
The chances of a MATIC bounce will probably depend on how the price reacts at this level.
From a fundamental standpoint, the asset could gain some momentum in the short term, with the anticipated MATIC to POL upgrade scheduled for September 4th. Polygon developers are pushing for the upgrade to turn MATIC into a highly productive token that will allow holders to earn rewards across multiple blockchains.
However, investors should also be wary of changes in the broader macroeconomic environment, according to CoinShares’ James Butterfill. The analyst predicts that data expected in the coming weeks will have a significant impact on market performance.
“Many are focussing (sic) on the payroll data next Friday as the next major economic release likely to influence US policy, alongside the SPI data on the 11th September, just prior to the 18th September likely interest rate cut. The big debate currently is if the FED will do 25 basis points or 50bp (sic) in September, we suspect following weaker than expected employment data that the market begins pricing 50bp, which is likely to be very supportive for Bitcoin prices.”
On the other side
- Typically, assets tend to rise for a long period of time before their price corrects as traders take profits.
Why this matters
The price of MATIC has significantly underperformed the broader cryptocurrency market over the past year, which has had a significant impact on investor interest. If this downward trend continues, it could paint a worrying picture for the future of the network.
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