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.
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.
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.
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.
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.