Polygon, the blockchain network with its native token MATIC, has seen a rebound above the $1 mark after a period of decline. Despite this recovery, investor interest remains tepid, raising concerns about a potential drop in value. Market participants are treading carefully, with some distancing themselves from MATIC following its recent price correction.
Investor Participation Declines
The reticence of investors is underscored by a noticeable decrease in on-chain activity, with the number of active addresses transacting on the Polygon network dropping significantly. Over the span of a week, the average daily active addresses fell from approximately 408,000 to 314,000. This decline is not exclusive to current holders; the generation of new addresses on the network has also slowed as potential investors hesitate amid market uncertainties, causing the network’s growth to sink to its lowest point since December of the previous year.
MATIC Price Outlook Remains Uncertain
Despite holding above the $1 threshold and even briefly surpassing the $1.02 resistance, MATIC’s price stability is in question due to the cautious stance of both existing and would-be investors. If MATIC’s value falls below the $1 support, it could face further decline, with a possible descent towards $0.88, marking its lowest level in a month. Conversely, should the token maintain above the $1.02 mark, it could challenge higher resistance levels, potentially upending bearish expectations.
The situation poses a conundrum for MATIC, as its future market position hinges on the return of investor confidence and subsequent on-chain activity. The current market scenario reflects a broader hesitancy within the cryptocurrency space, where investor sentiment can pivot rapidly and influence token performance.