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Cryptocurrency News Articles
POL Token Faces an Uphill Battle as September Trading Range Raises Profitability Concerns
Oct 03, 2024 at 11:23 pm
The POL token from Polygon found itself in a challenging position, diverging from the generally bullish sentiment seen in the broader cryptocurrency market.
As the broader cryptocurrency market experienced optimism and gains during September, one token that diverged from this trend was MATIC from Polygon. While many tokens rallied amid the favorable market conditions, MATIC encountered selling pressure, leaving holders to contend with unrealized losses. As October begins, the token’s future profitability hinges on its ability to break out of its narrow trading range.
September Trading Landscape
Throughout September, MATIC traded within a tight range, bound by $0.7 and $0.9. Following a key upgrade on the Polygon network, MATIC experienced a brief surge in buying pressure during the second half of the month. However, this buying momentum was short-lived, as the token encountered strong selling pressure during the last week of the month.
According to TradingView data, MATIC’s price dropped from a high of $0.89 on September 28 to $0.79 by the month’s end. As of October 2, the token was trading at $0.76, reflecting a 3.1% decline for the day and a 42% drop from its all-time high of $1.3 reached on March 13.
Profitability Woes for Holders
In contrast to Bitcoin and several altcoins that experienced notable gains during September, MATIC’s performance was lackluster. Data from Coinglass indicated that Bitcoin’s price rose by 7.29%, while Ether gained 3.56% during the same period. While some tokens, such as UNI, experienced gains of up to 70%, approximately 85% of MATIC holders are currently sitting on unrealized losses.
According to IntoTheBlock, 81% of MATIC holders who have maintained their position for over a year have seen their investments lose 27% of their value. This reality adds another layer of complexity to MATIC’s price action as it enters the fourth quarter.
Recent Ecosystem Developments
Despite the price struggles, Polygon has continued to make strides in its development. Recently, Polygon Labs activated the Ahmedabad hardfork on the Proof-of-Stake (PoS) mainnet following a two-week testing period on the Amoy testnet. This upgrade represents a substantial step in Polygon’s roadmap and includes three Polygon Improvement Proposals (PIPs)—PIP-30, PIP-36, and PIP-45.
These proposals aim to enhance the user experience for decentralized application (dApp) developers and users on the PoS chain. Notably, PIP-30 increased the maximum code size for dApps, allowing for more complex contract deployments. PIP-36 addressed issues with stuck bridge transactions, improving the overall efficiency of the network.
Technical Analysis of MATIC
Analyzing the MATIC/USDT pair on the 4-hour chart, the technical indicators suggest continued selling pressure. The Relative Strength Index (RSI) briefly bounced from the oversold zone but remains low, sitting at 29.87 at the time of writing.
Moreover, key moving averages signal weakening momentum. The 200-day Simple Moving Average (SMA) recently fell below the 100-day SMA on September 28, having crossed below the 50-day SMA just a day earlier. Such crossovers typically indicate bearish trends, suggesting that MATIC’s price may struggle to recover in the short term.
Historically, similar crossover formations have preceded price drops. For instance, following a previous bearish crossover on August 24, MATIC’s price fell from $1.02 to $0.79 by August 31.
Looking Ahead
As we move into October, MATIC token holders are keeping a watchful eye on whether the price can sustain itself above the $0.75 support level. The combination of unfavorable market conditions and technical indicators creates an uncertain outlook. However, if the token can regain momentum, it may provide some relief to the large number of holders currently facing losses.
Investors are advised to keep a close eye on market developments and technical trends, as these factors will play a crucial role in determining the future profitability of their investments in MATIC. For those looking to assess their current holdings, the MATIC Profit Calculator can provide insights into individual portfolio performance.
In conclusion, while September brought challenges for Polygon’s MATIC token, the upcoming weeks may determine the token’s fate and investor confidence. As the crypto market continues to unfold, the performance of MATIC will be closely monitored by both traders and long-term holders.
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