Polygon holders were left scratching their heads today as Polygon’s native token MATIC faced selling pressure seemingly out of the blue.
The selloff might came on the heels of a report from on-chain analytics platform Spot On Chain, which revealed that wallet address 0xa31 – linked to layer-2 scaling protocol Hermez Network which was acquired by Polygon in 2021 – deposited nearly $3 million worth of MATIC tokens to cryptocurrency exchange Kraken over the past few hours.
Hermez Network’s wallet address 0xa31 received close to 20 million MATIC (worth $19 million at the time) from Polygon’s treasury in late January. After today’s deposit, the wallet still holds over 16 million MATIC worth approximately $16 million.
It appears the entity controlling the wallet is slowly liquidating part of its MATIC holdings, likely exerting selling pressure on the open market with the deposits and subsequent sales on Kraken.
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Show more +With MATIC still held in sizable quantities by this whale address, further token dumps could be forthcoming depending on their motivation for profit-taking. If the address opts to fully liquidate holdings into fiat, MATIC could see protracted weakness until the systemic supply overhang is lifted.
At pixel time, MATIC changed hands at $0.94, up 2% on the day, the price still hasn’t reacted to what Spot On Chain reported. Traders are advised to keep a close eye on the activities of major token holders like address 0xa31, as their transactions often telegraph short-term price moves as seen today.
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