Polygon Sees Supply Drop as MATIC Leaves Exchanges
A renowned analytics company has revealed that blockchain scaling solution Polygon is seeing a precipitous decline in the supply of MATIC on cryptocurrency exchanges, despite the token’s recent explosive surge.
In a recent analysis, Santiment notes that the quantity of MATIC tokens on crypto exchanges has decreased from over one billion in mid-October to 833.03 million on November 4th.
“MATIC’s supply on exchanges continues to decline even as prices surge, showing that people are rather optimistic about more price increases.”
In less than a week, MATIC’s share price has surged by 44%, from $0.90 to $1.30, representing a blistering rise to start the month of November. MATIC has subsequently retraced and is now trading at $1.17 as of the time of writing.
Santiment notes, based on MATIC’s other on-chain indicators, that the coin’s surge coincides with Polygon’s strongest network growth in months. According to the analytics company, network growth is indicative of user adoption by monitoring the number of new addresses that transferred MATIC tokens for the first time.
“MATIC is seeing its greatest network expansion in months. A continuous network expansion would be desirable, but when it declines and the price continues to hover, establishing a divergence, it tends to signify a local peak since no new investors are entering.”
Santiment says that one-chain metric is warning that MATIC may be on the cusp of a reversal as an increasing number of traders join the rally. According to the analytics company, the seven-day ratio of the coin’s market value to its realized value (MVRV) indicates that MATIC holders are in a favourable position to lock in gains.