MATIC May Take The Crypto Market By Surprise, Here’s Why

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MATIC made a 180 degree turn earlier this year, following Bitcoin’s lead. The token, used to govern and secure the Polygon network, had been consolidating since mid-July, with erratic price action recorded in November.

As of this writing, the Polygon token has maintained its momentum since January with a 42.6% gain, breaking the range formed in 2022. Can MATIC holders continue the streak and target further gains?

February, a month of love or disappointment for MATIC?

MATIC’s funding rates remain neutral, with long positions rewarding short positions on most exchanges except OKX and CoinEx. According to on-chain analysis firm Jarvis Labs, negative rates and exceptionally present as a buying channel for investors.

MATIC Neutral Funding Rates Source: JarvisLabs

In addition to the above, the number of active addresses fluctuates depending on the price of MATIC. Each time the price action falls, the number of addresses follows. However, according to historical data from Jarvis Labs, the number of addresses holding the token has increased since January.

The number of MATIC addresses is increasing Source: JarvisLabs

Likewise, as investor confidence in the native Polygon token has grown, price volatility has increased over the past month, pushing the price to new highs since November. Jarvis Labs analysis suggests that when the 30-day price volatility increases on MATIC, the price tends to fall. Price and volatility metrics are currently trending higher on the 30-day timeframe, which could suggest the token will reverse some of its gains.

MATIC 30d price volatility is increasing. Source: Jarvis Laboratories

Additionally, the MATIC/USDT Cumulative Volume Delta (CVD) trading pair based on traded volume remained neutral. On the other hand, the MATIC/BUSD Matic couple saw spot auctions while the perpetual CVD declined.

In short, analysis from Jarvis Labs suggests that after MATIC’s long period of consolidation and breakout, the sentiment in the token should not be taken lightly. However, there are also warning signs of a decline.

Investors trust Polygon for the long haul

Recently, global investment manager Hamilton Lane Inc. announced that retail investors can now access its equity fund, Equity Opportunities Fund, through a new tokenized securitized fund on Polygon.

Hamilton Lane closed the fund at nearly $2.1 billion and made part of the vehicle available to retail investors through a feeder fund on a secondary basis. It will significantly increase access with a minimum investment of $20,000 compared to an average of $5 million.

MATIC bounces off the pullback on the daily chart. Source: MATIC/USDT TradingView

The Polygon token is trading at $1.1320, down 0.8% in the last 24 hours. MATIC is currently trying to break the next resistance level at $1.27. Failure to do so may result in a move back to the next support level at $0.98.

With the recent decision of the Federal Reserve (FED) to raise interest rates to 25 basis points, MATIC may have the opportunity to follow the market sentiment and take the next resistance to consolidate and recover the level of 1 $.4.

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