Bitrabo Editorial
Polygon (MATIC) price has surged 12% over the past week. While it is facing resistance at the $1 support line, on-chain data suggests that if certain bullish signals remain, the MATIC price might reach $2 in the long run.
Polygon (MATIC) is a leading Ethereum scaling solution. After the completion of Ethereum’s Proof of Stake transition in April, MATIC’s price initially dropped due to investors moving their staked assets to the Ethereum mainnet.
However, the scenario changed in May as the number of MATIC tokens locked up in smart contracts increased significantly. This has led to the question of how high the MATIC price can go if investors keep staking assets on the Polygon network at this pace.
Investors Are Increasing Their MATIC Stakes Again
MATIC investors have started staking their tokens on the Polygon network again after mass unstaking in April. In May, Polygon network investors staked an additional 50 million tokens (0.5% of the total circulating supply).
The Supply in Smart Contracts metric tracks the percentage of a cryptocurrency’s circulating supply that investors have locked up across various staking platforms. When it rises, it leads to a temporary shortage in market supply. Hence if investors continue to increase their stakes at this pace, the recent MATIC price surge could turn into a prolonged bull rally.
User Activity Is on the Rise
Polygon (MATIC) blockchain network has started to attract increased user traction lately. While MATIC’s price has faced a mild correction around the $0.90 resistance level, the active users deploying transactions on the network have remained healthy. During May 22 and May 31, the Daily Active Addresses (DAA) rose by 25% from 250,000 to 313,000 active users.
The DAA metric tracks the number of wallet addresses interacting on a blockchain network. When it rises during a price downtrend, it signals that the asset is building momentum for an imminent recovery.
To sum up, if crypto investors continue to stake MATIC, and users remain active, investors can expect a prolonged price rally.
MATIC Price Prediction: Road to $2
According to IntoTheBlock‘s Global In/Out of Money (GIOM) data, the next MATIC price rally could reach $2. However, for the bulls to be confident of this bullish price prediction, MATIC must first break through the initial critical resistance at $1.
However, profit-taking by 52,000 investors that bought 4.53 billion tokens at the average price of $0.95 may trigger a pullback. But if the positive price prediction plays out, the bulls can push for the $2 target.
Still, the negative Polygon price prediction could negate if MATIC retraces unexpectedly below $0.85. Nevertheless, the 20,700 investors that bought 117 million tokens at an average price of $0.86 can provide support, and if that support level breaks, it could trigger a larger drop toward $0.79.
Disclaimer
This price analysis article is for informational purposes only and should not be considered financial or investment advice. Bitrabo always conducts accurate and unbiased reporting, but market conditions are subject to change without notice. Always conduct your research and seek professional financial advice before making any financial decisions.