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Polygon’s Token Migration: Facing Persistent Challenges Amid New Launch
Sep. 05, 2024. 1 min. read.
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Despite Polygon's migration from MATIC to POL, the network continues to struggle with declining user activity and falling token value, indicating unresolved underlying issues.
Polygon’s recent decision to migrate its native token MATIC to a new token, POL, completed on September 4, has not remedied the network’s underlying issues. Despite hopes that a new token name would invigorate the market, both user activity and token value continue to decline, signaling persistent challenges.
As the network shifted from MATIC to POL, changing the token’s utility to become the main gas and staking token, it was met with a lukewarm market reaction. Currently, POL is trading at $0.37, and although its trading volume has surged by 925%, the price has simultaneously dropped by 3%. This juxtaposition suggests significant selling pressure, possibly fueled by a panic-selling phase among investors reacting to the migration and broader market trends.
“This heightened market activity, driven by strong selling pressure, typically indicates fear and uncertainty among investors, which can exacerbate the downturn,” experts suggest. This phenomenon is further evidenced by a troubling ratio of transactions ending in a loss versus those yielding a profit, standing at 0.51, according to BeinCrypto’s analysis. This implies that more transactions are incurring losses than generating gains.
Looking ahead, the technical outlook for POL is not promising. The Moving Average Convergence/Divergence (MACD) indicator places POL’s trend firmly in the downtrend territory, with the MACD line beneath both the signal line and the zero line, suggesting strong bearish momentum. Traders might see this setup as a signal to exit long positions.
However, there’s a glimmer of hope. POL’s Relative Strength Index (RSI) is currently at 28.67, indicating the asset might be oversold and a price rebound could be on the horizon. If new demand emerges, POL’s price could potentially rise to $0.55. Conversely, further sell-offs could drive the price down to $0.35, negating any optimistic forecasts.
Source: Polygon Token Migration: Different Name, Same Problem
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