3 Million Polygon (MATIC) Transfer: Incoming Price Volatility?

A significant volume of Polygon’s MATIC tokens was recently moved from a wallet linked to Hermez Network to a cryptocurrency exchange.

Blockchain analytical firm SpotOnChain reported that an address associated with Polygon’s Hermez Network moved about 3 million MATIC tokens, equating to $2.85 million, the crypto exchange Kraken. The address still holds approximately 16.8 million MATIC tokens, valued at approximately $16.1 million.

Is a MATIC Sell-off on the Horizon?

Usually, transfers to exchanges often signal a bearish sentiment, indicating a potential intention to sell. For this reason, there are concerns about a looming sell-off despite the asset’s robust price performance.

Crypto analysts anticipate a significant correction in the MATIC’s value. Still, the bearish outlook could be followed by a bullish impulse.

“MATIC price is in a diagonal pattern, so it is also possible that the price is already in wave iv. Ideally, the price does not break below $0.8328 to keep the upside pressure alive,” a prominent trader said.

Polygon (MATIC) Price Performance. Source: Man of Bitcoin

MATIC’s price has declined by 1.3% to $0.9218. This contrasts a weekly performance that saw it gain around 10% in the last seven days.

Last year, the Hermez Network, an open-source Zero Knowledge Rollup, merged with Polygon. This integration led to the rebranding of Hermez as Polygon Hermez. It is focused on decentralized zk-rollup technology, specifically aimed at enhancing the scalability of payments and token transfers atop the Ethereum blockchain.

Proof-of-Stake Addresses Hit ATH

Despite the growing signs of a sell-off, Polygon’s proof-of-stake chain reached a new all-time high of 845,350 daily active addresses on February 16, per on-chain data. This milestone arrived 16 months after the previous high of nearly 800,000 active addresses in October 2022.

It aligns with a consistent growth trend in unique Polygon addresses, with over 11 million addresses created since the beginning of the year, propelling the total count beyond 403 million.

Polygon POS Active Addresses. Source: PolygonScan

Still, there is a notable decline in daily transaction volume. PolygonScan data reveals a reduction to approximately 3.8 million transactions on February 16, down from the 16.4 million recorded on November 16, 2023.