The cryptocurrency market has entered a prolonged period of consolidation, and within this environment, Polygon’s native token MATIC is showing increasing signs of weakness. Over the past seven days alone, MATIC has declined by 11%, reflecting growing investor concern over its short-term price trajectory. With network growth slowing and key on-chain metrics pointing to waning retail and institutional interest, many analysts are questioning whether the worst is yet to come.
👉 Discover how market trends are shaping the future of Layer 2 tokens like MATIC.
Polygon Struggles with Stagnant Network Growth
Polygon was designed as a Layer 2 scaling solution to address Ethereum’s persistent issues with high gas fees and low transaction throughput. Initially, it gained rapid adoption due to its fast, low-cost transactions and seamless compatibility with Ethereum-based decentralized applications (dApps). However, recent data suggests that momentum within the Polygon ecosystem may be fading.
According to on-chain analytics from Glassnode, the number of new addresses created on the Polygon network has been in steady decline since December 2022. This downward trend appears to have accelerated following the announcement of Ethereum’s Shanghai upgrade—scheduled for April 12—which allows stakers to withdraw their ETH after the transition to proof-of-stake (PoS).
While Ethereum’s upgrade is a positive development for the broader ecosystem, it has sparked renewed debate about the long-term relevance of Layer 2 solutions like Polygon. Some investors now question whether Polygon can maintain its competitive edge if Ethereum continues to improve its scalability and user experience natively.
A closer look at the data reveals that after a brief recovery in early March, daily new address creation on Polygon entered another downturn around March 17—just days after the Shanghai upgrade date was confirmed. By March 21, the number of new daily addresses had dropped to 1,318, a 32% decrease from the local peak of 1,960 recorded on February 17.
This sustained decline in user acquisition is a red flag for any blockchain platform. New wallet creations are often seen as a leading indicator of organic demand and ecosystem health. When fewer users are joining the network, it becomes increasingly difficult for the native token—MATIC—to generate upward price pressure.
Whale Activity Signals Loss of Confidence
Beyond retail participation, investor sentiment among large holders—commonly referred to as “whales”—is also turning bearish. Data from Santiment shows that addresses holding between 10 million and 100 million MATIC tokens have collectively sold or redistributed approximately 43 million MATIC (worth around $55.9 million at current prices) over the past month.
This shift is significant not only in volume but also in timing. Between February 22 and March 21, the total reserves held by this whale cohort dropped from 253 million MATIC to 211 million—a reduction of over 40 million tokens in just four weeks.
More concerning is the observed correlation between whale trading behavior and price movements. The data indicates that large-scale buying and selling activity has become tightly aligned with MATIC’s market price, suggesting reactive rather than strategic positioning. In volatile markets, such patterns often precede further downside volatility, as panic selling can trigger cascading liquidations.
👉 Learn how whale movements impact token prices across major crypto networks.
MATIC Price Outlook: Can It Avoid a Drop Below $1?
To assess potential price support levels, IntoTheBlock’s exchange order book depth model offers valuable insight. This model aggregates limit orders from token holders across major exchanges, highlighting key zones where significant buy or sell walls exist.
Currently, the model identifies a strong demand zone at $1.03—approximately 5% below the present price. At this level, there is buying interest totaling around 3.5 billion MATIC tokens. If this support holds, it could temporarily stabilize the market and prevent deeper losses.
However, should selling pressure intensify and this barrier fail, the next major support lies at $0.90. Here, an additional 1.2 billion MATIC are waiting to be purchased, forming a secondary buffer against further declines.
On the upside, MATIC would need to break through $1.14—a resistance zone where 138 million tokens are listed for sale—to invalidate the current bearish sentiment. A successful breakout here could open the path toward $1.30, where another 1.35 billion MATIC are poised to be sold.
Given the current lack of positive catalysts and weakening fundamentals, most technical indicators suggest that upward momentum remains fragile.
Frequently Asked Questions (FAQ)
Q: Why is MATIC losing value recently?
A: MATIC is declining due to a combination of broader market weakness, reduced user growth on the Polygon network, and increased selling pressure from large holders (whales), all contributing to bearish sentiment.
Q: Is Polygon still relevant after Ethereum’s Shanghai upgrade?
A: While Ethereum’s upgrades enhance its native scalability, Polygon continues to offer faster and cheaper transactions for certain dApps. However, its long-term relevance depends on continued innovation and ecosystem expansion.
Q: Could MATIC drop below $1?
A: Yes, if current support at $1.03 fails, MATIC could fall toward $0.90. Whether it drops below $1 will depend on market conditions and investor confidence in the coming weeks.
Q: What factors influence MATIC’s price?
A: Key factors include network activity (new addresses), whale movements, overall crypto market trends, Ethereum’s performance, and adoption of Polygon-based applications.
Q: How can I track MATIC’s recovery potential?
A: Monitor on-chain metrics like new wallet creations, transaction volume, whale accumulation patterns, and exchange order book depth for early signs of renewed demand.
Q: Where should I trade MATIC securely?
A: Choose regulated platforms with strong security practices and deep liquidity to ensure smooth trading experiences during volatile periods.
👉 Stay ahead of price swings with real-time data and secure trading tools.
Core Keywords
- MATIC price prediction
- Polygon network growth
- MATIC whale activity
- Layer 2 cryptocurrency
- Ethereum scaling solution
- crypto market downturn
- MATIC support levels
- blockchain user adoption
Final Thoughts
While Polygon remains one of the most established Layer 2 solutions in the Ethereum ecosystem, recent trends paint a cautious picture for MATIC holders. Declining user growth, combined with heavy outflows from large investors, signals weakening fundamentals at a time when market sentiment is already fragile.
For MATIC to regain traction, it will need clear catalysts—such as major protocol upgrades, new partnerships, or surging dApp usage—to reignite investor interest. Until then, traders should remain vigilant, especially around key technical levels near $1.03 and $0.90.
As always in crypto, staying informed with reliable data and using secure trading platforms can make all the difference in navigating uncertain markets.