Polygon’s MATIC Price Faces Potential Downturn Due to Major Holder’s Sales

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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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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Rene Peters
Rene Peters

Rene Peters is editor-in-chief of CaptainAltcoin and is responsible for editorial planning and business development. After his training as an accountant, he studied diplomacy and economics and held various positions in one of the management consultancies and in couple of digital marketing agencies. He is particularly interested in the long-term implications of blockchain technology for politics, society and the economy.