Around 1.4 billion MATIC tokens were transferred from Polygon’s vesting contract Monday.
The transaction was followed by a spike in selling pressure, pushing the token below critical support.
MATIC must regain $0.89 as support soon to avoid a steep correction to $0.60.
Share this article
Polygon has dropped below a vital area of support after a series of on-chain transactions sparked a furore within the cryptocurrency community.
Polygon’s MATIC Faces Potential Selloff
Polygon has become the talk of the crypto community after 14% of the total MATIC supply was transferred from its vesting contract.
A sense of commotion struck the cryptocurrency market after on-chain data revealed that 1.4 billion MATIC tokens had been transferred from Polygon’s vesting contract. In response, Polygon co-founder Sandeep Nailwal confirmed that the token release was part of a “planned movement” and urged the community to check Polygon’s vesting schedule.
Polygon’s team detailed the allocation for the 1.4 billion MATIC tokens vested in an announcement following the unlock. According to the team, the goal is to distribute these tokens across different segments of the project. 546.6 million MATIC will go to the foundation’s treasury, 200 million MATIC will be used for staking rewards, and 640 million MATIC will be allocated to the team.
MATIC dipped below a crucial support area following the token unlock, increasing the risk of a sell-0ff.
IntoTheBlock’s In/Out of the Money Around Price (IOMAP) shows that more than 7,400 addresses have previously purchased nearly 1.6 billion MATIC between $0.89 and $0.92. If prices stay below this interest zone, the likelihood of some market participants exiting their positions to prevent losses increases.
MATIC’s In/Out of the Money Around Price (Source: IntoTheBlock)
The pessimistic outlook coincides with a sell signal that the Tom DeMark (TD) Sequential indicator has presented on MATIC’s three-day chart. The bearish formation developed after MATIC was rejected by the 50-day moving average. If validated, Polygon could enter a one to four three-day candlestick correction that pushes prices to $0.60.
MATIC/USD three-day chart (Source: TradingView)
Given the importance of the 50-day moving average, MATIC would likely need to print a three-day candlestick close above it to invalidate the bearish thesis. Still, the 200-day moving average is sitting just above this resistance level, suggesting that Polygon will need to rise above $1.20 to advance higher. If it breaks through resistance, it could surge to $1.65.
Disclosure: At the time of writing, the author of this piece owned BTC and ETH.
For more key market trends, subscribe to our YouTube channel and get weekly updates from our lead bitcoin analyst Nathan Batchelor.
Share this article
The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
See full terms and conditions.