Polygon price declines below $0.80, wiping out gains from past two weeks

Polygon (MATIC), the native token of the Polygon blockchain, broke below the $0.80 mark in the early Monday trading hours, extending the losses seen over the weekend. The token’s price decline comes after large-wallet investors, also known as whales, opted to collect profits after the price rally during the first two weeks of the month. MATIC’s on-chain metrics, particularly the surge in supply on crypto exchanges, suggest a bearish outlook for the token, whose value has fallen by around 14% over the past week.

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MATIC on-chain metrics support price decline 

MATIC supply on exchanges climbed from 9.05% on December 1 to 9.18% on Monday, hitting the highest level in the past six months. A large volume of MATIC tokens on exchanges indicates a rise in selling pressure, supporting a bearish thesis for the Ethereum scaling token.

The rise in the token’s supply on exchanges is accompanied by spikes in inflows in the same timeframe, as seen in the Santiment chart below.

MATIC supply on exchanges. Source: Santiment

The Network Realized Profit/ Loss (NPL), an on-chain indicator determining the profit or loss of MATIC transactions on a given day, shows a spike in profit-taking on December 12, 14 and 17, with the largest spike in profit-taking observed on December 17. These spikes coincide with an increase in whale transactions (valued at $100,000 and higher), suggesting that large-wallet investors opted to book unrealized gains.

Profit-taking supports a bearish thesis for MATIC price. 

NPL and whale transaction count in MATIC. Source: Santiment

At the time of writing, MATIC price is $0.7908, a decline of over 14% in the past week. The altcoin will likely note further price correction as on-chain metrics turn bearish.