Bears hound MATIC despite Polygon’s PoS efforts

• Polygon’s daily transactions increased by 20% last week. 
• MATIC’s price chart was red, and most metrics remained bearish. 

Polygon [MATIC] has failed to paint its chart green, which has sparked fear among investors. The token’s price action remained southward, while the PoS blockchain’s network activity gained upward momentum. 

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A closer look at MATIC’s on-chain activity shed light on what was restricting the token’s value from moving up.

Polygon is witnessing a surge in network activity

Today In Polygon, a popular X (formerly Twitter) handle that posts updates related to the blockchain’s ecosystem, recently pointed out that Polygon’s daily active users have increased by 10% over the last seven days.

Thanks to the rise in users, the blockchain’s daily transactions also spiked by 20% during the same period, suggesting an increase in network activity.

NEW:

Over the last 7 days, Polygon PoS daily active users increased 10% and daily transactions increased 20%. pic.twitter.com/1kCC4J05v2

— Today In Polygon (@TodayInPolygon) October 14, 2023

As per Artemis’ data, not only did Polygon’s network activity rise, but a similar trend in increment was also noted in terms of the blockchain’s revenue and DEX volume. However, Polygon’s TVL took a steep southward turn.

Source: Artemis

MATIC’s performance is not on par

Like the blockchain’s TVL, MATIC’s price also dropped over the last week. In fact, as per CoinMarketCap, at the time of writing, MATIC was down by more than 8%, and was trading at $0.5177 with a market capitalization of over $4.8 billion, making it the 13th largest crypto.

Over the last week, MATIC’s social volume remained high, but most of the mentions might have been bearish. This seemed to be the case as Polygon’s Weighted Sentiment sank over the last few days.

Source: Santiment

CryptoQuant’s data revealed that investors were actually selling their holdings, which might have played a role in MATIC’s downtrend. Notably, Polygon’s Exchange Reserve was increasing, meaning that it was under selling pressure at the time of writing.

However, while selling pressure was high, the scenario might change as MATIC’s stochastic went into the oversold zone. This could cause a trend reversal and, in turn, help MATIC’s price.

Read Polygon’s [MATIC] Price Prediction 2023-24

But other metrics remained bearish. Notably, MATIC’s Binance Funding Rate was green, meaning that derivatives buyers were purchasing the token at a lower price at the time of writing. Its MVRV ratio was also relatively low.

Nonetheless, MATIC’s Network Growth was high, suggesting that more new addresses were created to transfer the token.

Source: Santiment