- Polygon’s POL (MATIC) has experienced a price crash.
- The POL crash was a result of a general market decline driven by macroeconomic speculation.
- The likelihood of a POL recovery will likely depend on the Fed’s expected interest rate decisions.
Over the past few months, the price of crypto assets has moved in a steady and rhythmic pattern of one step forward and one step back. POL (formerly MATIC), the upgraded token of the Polygon PoS network, is no exception. The asset completely erased the gains it had made at one point over the recent weekend, outpacing the broader crypto market.
Polygon’s POL (MATIC) Gives Up Binance-led Gains
On Friday, September 13, Polygon’s POL surged more than 18% from the $0.38 range to highs around $0.45, outperforming the broader crypto market after Binance announced it was completing the migration from MATIC to POL and listing the new token. However, by Monday, September 16, the asset had now given up all of its gains.
POL is again trading at $0.38, down 6% over the last 24 hours. CoinMarketCap Data as of this writing. The asset decline comes amid a broader market selloff this week fueled by speculation about an expected rate cut by the Federal Reserve.
Bitcoin (BTC), the largest cryptocurrency by market cap, is down 3.81% over the past 24 hours, falling below the $58,000 level. Similarly, other major crypto assets such as Ethereum (ETH), BNB, and Solana (SOL) have recorded losses of 4%, 5%, and 3%, respectively.
What are the chances that POL(MATIC) will rebound?
Like the broader cryptocurrency markets, the potential for a POL rebound will likely depend on how much the Fed cuts rates.
In a previous statement DailycoinJames Butterfill, head of research at CoinShares, suggested that a 50bp rate cut would provide significant momentum to the crypto market. Veteran trader Craig Shapiro seemed to support Butterfill’s view in a post a week ago, adding that a cut of less than 50bp could lead to a risk-on correction.
At the time of writing, the CME FedWatch tool projects a 59% chance of a 50bp cut on September 18, and a 41% chance of a 25bp cut.
On the other side
- Polygon’s native token had already been in a downward trend for several months prior to the recent market decline.
- The magnitude of the impact of the Fed’s decision to cut rates is not yet known.
Why this matters
POL’s weekend surge has sparked renewed optimism about the asset’s price performance after months of declines.
For more information about Polygon, read:
Polygon’s POL (MATIC) Surpasses the Market with 18% Surge on Binance Migration
Vitalik thinks we are still early. Find out why:
Here’s why Vitalik believes it’s “still early days” for cryptocurrencies: