Polygon’s native token MATIC price has dropped by 25% after jumping to a two-month high of around $0.58 on Aug. 25. However, the price could not sustain momentum and fell back rapidly to a 10-day low of $0.437 on Aug. 29, following an additional 5% decline over the past 24 hours.
Last week’s bullish momentum on the daily chart led to a breakout from a 50-day descending channel pattern. However, the rally failed to break through the $0.60 mark, causing a rapid pullback to the previous resistance trend line. This retest and strong momentum suggest a potential continuation of the bearish trend. According to Coingecko, MATIC has remained down 85% from its December 2021 all-time high of $2.92.
The daily Relative Strength Index (RSI) has swiftly fallen from the overbought territory, plunging below the 50% midpoint. Meanwhile, the MACD indicator has quickly reversed, with the MACD line crossing below the signal line, further indicating bearish sentiment. As a result, Polygon’s price is flashing warnings of a continued decline.
Polygon network sees a spike in active addresses and dormant coin activity
During MATIC’s corrective phase, Santiment pointed out that the Polygon network has been in a downtrend since the broader market pullback began in March.
However, there are signs of recovery, with an uptick in dominant coin movement and a surge in active addresses on the Polygon network.
Notably, the number of active addresses has reached its second-highest level in 2024, with 3,369 MATIC addresses, and there has been significant movement of 69 billion MATIC tokens. Santiment stated:
A notable spike in on-chain activity may be a sign that a MATIC reversal may be brewing soon.
Santiment
These increases can be attributed to the growing adoption of decentralized applications (dApps) on the Polygon network and developers’ growing interest in the scalability offered by this Layer-2 solution. In particular, the number of daily transactions on the Polygon network has surpassed that of the main Ethereum network on several occasions, indicating a growing preference for the speed and reduced cost of transactions on Polygon.
MATIC price breaks below key Fibonacci levels
According to Fibonacci levels in the falling channel pattern, Polygon’s bearish trend has not reached the 38.20% level near $0.60 and has dropped below the 23.60% level at $0.50.
The next support levels for Polygon are at $0.40, with a key baseline at $0.38 and further downside risk at $0.3649, representing a potential 19% decline. If a reversal occurs after the retest and the broader market recovers, the next resistance levels are at the 23.60% Fibonacci level at $0.50 and the 38.20% level at $0.60.
Amid these developments, Binance announced support for Polygon’s upcoming network token migration from MATIC to POL, scheduled for September 4.
