Polygon sees double-digit spike in locked assets, MATIC attempts recovery

Polygon, the largest Ethereum scaling solution, has noted an increase in the total value of assets locked (TVL) in projects within its ecosystem. This correlates with higher demand for the projects and their increasing relevance among market participants in Polygon. 

Santiment data shows that Polygon’s on-chain metrics support a recovery thesis for the native token, MATIC. 

MATIC is trading around $0.57000 at the time of writing, on Binance. 

Polygon network experiments massive growth in TVL of protocols

In a recent tweet, Sandeep Nailwal, co-founder of Polygon, notes the growth in TVL of protocols on the network:

Alongside, the rise in demand for protocols in the Polygon network, on-chain data shows that MATIC’s supply on exchanges is on a steady decline. MATIC holders have consistently realized losses, which is typically a sign of capitulation. 

Meanwhile, MATIC supply on exchanges is down by 16.82 million in the past two months, between April 21 and June 21, 2024. A decrease in MATIC on exchanges supports a bullish thesis for the asset, as it implies a reduction in selling pressure on the scaling token. 

The Network Realized Profit/Loss metric (NPL) shows several slumps in the course of the last two months, signaling MATIC holders shed their assets at a loss. This is also a sign of capitulation, so a recovery in MATIC price is likely. 

MATIC supply on exchanges and network realized profit/loss 

MATIC attempts recovery after 5% decline in seven days

MATIC has been in a downward trend since March 13. The Ethereum scaling token is likely to rally towards the Fair Value Gap between $0.6694 and $0.7140. This marks over 17% gains from the current price level. 

The Relative Strength Index (RSI), a momentum indicator, reads 35.09. The RSI has dipped closer to 30, the oversold level on several occasions in the past week. When an asset is oversold, it implies that it is trading at a price lower than its intrinsic value. This generates a potential buy signal for sidelined traders.

MATIC/USDT 1-day chart 

If MATIC sees a daily candlestick close below the June 19 low of $0.5541, it could invalidate the bullish thesis for the scaling token. In that case, traders can expect the altcoin to find support at the June 18 low of $0.5148.