NEW YORK, NY – The digital asset Polygon, known as MATIC, experienced a significant surge in Open Interest as traders rushed to join the bullish trend. However, despite the impressive price surge last week, reaching a high of $0.5819, the failure to break through a key resistance level raised concerns about the bearish dominance in the market.
The rally in price led to a doubling of Open Interest, signaling a strong bullish sentiment among investors. Nevertheless, the subsequent 7.5% decline in price hinted at a shift in market dynamics. Reports indicated that many MATIC investors, including short-term holders, were at a loss, highlighting the potential risks associated with the current price levels.
Market analysis revealed that a substantial number of addresses holding MATIC between $0.456 and $0.62 were facing losses, suggesting a potential wave of selling pressure if prices were to bounce within a specific range. Moreover, with the psychological level of $0.5 likely to attract increased buying activity, the market could witness heightened volatility in the coming days.
Data on daily active addresses showed a downward trend, indicating a decrease in network adoption and demand for the token. While the surge in price pushed the weighted sentiment to its highest point since May, a surge in dormant circulation on a particular date served as a warning signal for potential buyers.
Despite a bullish market structure and favorable indicators for buyers, MATIC faced rejection at a crucial weekly resistance zone between $0.56 and $0.58. As a result, price consolidation around this range is expected before a potential downward move towards $0.5 or even $0.45 becomes imminent. Overall, market participants are advised to exercise caution and closely monitor price movements to navigate the volatile cryptocurrency market effectively.