Yesterday, a slew of coins followed Bitcoin’s lead and rallied alongside it. However, when the king-price coin’s began to “chill” around $62k, most alts took a step back.
Nonetheless, MATIC was the only alt [aside from NU] in the top 100 to maintain double-digit 24-hour appreciation numbers at the time of writing.
MATIC finally flipped its “consolidation” narrative yesterday, registering a massive green candle on its price chart after experiencing its own share of consolidation over the last few months. MATIC managed to close around $1.6 after opening at $1.2 on Friday, a level last seen on September 7th.
During most uptrend/downtrend phases, MATIC has followed Ethereum’s lead. Consider this: in May, when Ethereum was setting new highs on a daily basis, MATIC increased by 350% [from $0.6 to over $2.7] in just two weeks. Notably, Bitcoin’s price chart was trending downward at the same time.
Ethereum, on the other hand, has increased by less than 1% in the last day. As a result, one could argue that MATIC’s relationship with ETH is gradually fading.
Even if the preceding argument appears to be correct for the time being, it should be noted that it will not hold up in the long run.
This time, the recent listing of MATIC on the South Korean exchange Upbit triggered the alt’s surge. MATIC recorded a trading volume of $1,870,086,050 in the previous 24 hours – equivalent to 28.73 percent of the exchange’s total volume.
Tokens are not exchanged or listed on a daily basis. However, whenever they are, they end up feeding the price of any asset. As a result, without this event, MATIC’s price would not have been able to make such rapid gains in such a short period of time.
Eventually, the cumulative withdrawal transactions [from exchanges] reached a 4-month high yesterday, with the reading exceeding 13k. In this context, an increase in withdrawal transactions indicates that the accumulation trend is active, whereas a decrease indicates the opposite.
The surge, however, was short-lived, and the previously mentioned level could not be sustained for long. The chart below clearly shows how the transaction count fell precipitously. In fact, at the time of writing, it had returned to its 6-month lows.
However, the price DAA divergence has recently increased. Since the end of last month, Santiment’s chart has been displaying a strong bullish signal.
As such, this model monitors the relationship between the coin’s price and the number of daily active addresses interacting with the coin. When the DAA divergence increases in tandem with the price, it indicates a buy signal. When the number of active addresses falls during a price increase phase, selling pressure is induced.
The fact that MATIC has been able to maintain its bullish streak on this chart only demonstrates the good health of the active addresses. In effect, the environment is favorable for MATIC’s rally to continue.
The Upbit hype would fade over time, but the token’s fundamentals and relationship with Ethereum would continue to have a significant impact on its price.
As a result, if Ethereum continues to rise, MATIC’s price is likely to follow suit. The repercussions of this would cause exchange withdrawals to rise again, and the accumulation narrative to re-emerge.
However, if this does not occur, MATIC’s price increase may only be temporary.