Analysis of MATIC Price Decline on Polygon Network

The MATIC token's price, which fuels Polygon's leading Layer-2 ecosystem, has experienced a notable drop following its peak at $1.22 on March 14. After a consolidation phase spanning from April 14 to June 7, the price broke below the lower boundary of the horizontal channel, resulting in a 33% decrease.

Unveiling MATIC's Performance

An in-depth assessment of MATIC's price performance on-chain indicates a substantial decline in the demand for altcoins among traders. This decline is partially based on insights gathered from the Price-Daily Active Addresses (DAA) Divergence metric, which juxtaposes an asset's price movements with changes in the quantity of daily active addresses. At the current time, MATIC's Price-DAA data reveals a negative value of -35.59%. Noteworthy is the fact that this value was last above zero on October 24, 2023.

When the Price-DAA metric registers below zero, it signifies a dwindling number of daily active addresses engaged in trading the asset. A negative value of -35.59% represents a significant decrease in active addresses, signaling bearish sentiment for MATIC. The convergence of the price slump and negative Price DAA Divergence indicates a reduction in both the token's value and network engagement on Polygon.

Furthermore, the Relative Strength Index (RSI) for MATIC stands at 21.17, corroborating the aforementioned findings. The RSI, ranging from 0 to 100, evaluates an asset's market conditions as overbought or oversold. Values above 70 indicate overbought conditions, while values below 30 suggest oversold conditions. Despite the RSI data hinting at a potential price surge for MATIC, the prevailing bearish trend poses challenges to this anticipated upward movement.

Technical Insights on MATIC

As the downward trajectory for the altcoin gains traction, MATIC's price erosion is anticipated to persist. According to the Elder-Ray Index, which has remained negative since the downturn initiation on June 7, bearish dominance prevails in the market.

Presently, MATIC's Elder-Ray Index reading is -0.15. Should bears uphold their market control, they are likely to steer the token's price further downward. Although a decline to as low as $0.42 remains plausible, proactive investor responses during the downtrend and heightened buying pressure could propel MATIC's price back up to $0.49.