The Polygon [MATIC] network has been going through a fascinating phenomenon where its network growth and price movement diverged. Despite this, there is reason to believe that an uptrend in one of these metrics could propel the token, but only if it can be sustained over time.
Read Polygon’s [MATIC] Price Prediction 2023-2024
According to data from Santiment, Polygon’s network growth declined on 21 January and continued to do so until around 19 February. Interestingly, during this period of network decline, the price of MATIC moved in the opposite direction.
However, this divergence was not a positive sign, as it lacked new addresses to contribute to transaction volume, resulting in a bearish trend.
Source: Santiment
Due to the bearish divergence, the price of Polygon’s token experienced a sharp decline of up to 40%. However, things looked up in March as the network growth increased again, coinciding with a correction in the MATIC token’s price.
This time around, the divergence between network growth and price was bullish, and it is expected to impact the price of MATIC positively going forward.
After reaching the $1.5 price level on 17 February, MATIC’s price has been on a consistent downtrend, resulting in a loss of almost 30% in value. As of this writing, the token was trading at around $1.1 with a gain of over 1%.
Source: TradingView
The Moving Average Convergence Divergence (MACD) indicator suggested that Polygon was in a bearish trend at press time. The MACD flipped below the zero line on the daily time frame, indicating a bearish trend. However, the bearish trend was relatively weak.
Furthermore, the 30-day Market Value to Realized Value ratio (MVRV) of MATIC has been below zero since 18 March. As of this writing,
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