Polygon (MATIC) recently broke below the crucial support level at $0.5 and is at risk of further price declines. This price drop is thanks to several traders who offloaded their tokens as soon as Polygon reached this support level amid the downtrend in the broader crypto market.
Polygon Faces Significant Selling Pressure
The Exchange-Onchain Market Depth indicator on the market intelligence platform IntoTheBlock shows that Polygon is currently facing significant selling pressure. Over 90 million tokens were sold after the coin hit $0.5. This indicator tracks the order books of the top 20 exchanges and shows the average price at which traders are looking to buy and sell the token.
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Polygon bulls could not defend the crucial support level of $0.5 as further data from IntoTheBlock shows that just over 55 million tokens were bought at an average bid price of $0.49. Meanwhile, Polygon is at risk of further price declines, with data from IntoTheBlock showing that the sell orders continue to outweigh the buy orders.
The silver lining amid this wave of sell-offs is that Polygon whales look to have maintained their confidence in the MATIC token and have taken advantage of this price dip to accumulate more tokens. Data from IntoTheBlock shows that large holders’ net flows have increased by over 1,700% in the last seven days, indicating accumulation among these investors.
Only 3% of Polygon holders are currently in the money, which could lead to further price drops for the crypto token. If the crypto token doesn’t rebound soon enough, the 96% of investors currently at a loss could cut their losses at some point, thereby triggering another wave of sell-offs for MATIC.
Thanks to its bearish price action, Polygon recently dropped out of the top 20 crypto rankings by market cap. Data from CoinMarketCap shows that it is currently the twenty-first largest crypto token by market cap, behind Litecoin.
Market Conditions Not Making It Easier For MATIC
The current conditions in the broader crypto market have also contributed to Polygon’s recent decline. Bitcoin recently dropped to as low as $63,500 from $69,000, dragging altcoins down in the process. Tokens like MATIC have suffered more significant price drops because of their strong positive price correlation with Bitcoin.
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