NEW DELHI (CoinChapter.com) — The cryptocurrency market turned into a sea of red on Nov 28 as the price of most tokens moved south following Bitcoin’s descent to $16,200. Similarly, Polygon (MATIC), the tenth largest crypto by market cap, plunged 4.2% in a day.
And it appears a whale is behind MATIC’s ongoing downside spree, per on-chain data.
Polygon Whale Could Crash Prices
Holders of a large bag of tokens, also known as whales, can often dictate the price of the underlying cryptocurrency. Those like Polygon are more prone to whale movements than others since a large chunk (67%) of its circulating supply is concentrated in the hands of a few rich investors.
Data tracker Etherscan detected a flurry of large Polygon transfers. Notably, a whale sent 10 million MATIC tokens worth $8.2 million to a wallet address associated with Binance on Nov 27. A deeper dive revealed that the whale sold the tokens after the transfer and had 36.4 million left as of Nov 28.
Meanwhile, MATIC’s price fell on the chart each time the whale sold its holdings. A likely explanation for the decline was that the whale dump triggered a panic reaction among retail investors, who often gauge whale movements to predict price changes.
IntoTheBlock presented a strikingly similar narrative.
The platform revealed that retail investors and traders were turning increasingly bearish on MATIC amidst the whale dump. The Polygon token’s trades per side, an electronic list of trades on its order book, highlighted a plethora of sell orders on exchanges.
Besides, only a small cohort of traders placed buy orders for 595 MATIC, while most had continuously sold the Polygon tokens throughout the day. The fractal points to another imminent price drop.
Polygon (MATIC) Price Technical Analysis
Even from a technical standpoint, MATIC was poised to drop further in the coming days.
Following the whale dump, the token fell by as much as 6.9% and tagged a six-day low at $0.80. Despite a small recovery, the candles were parked below their 4H 20, 50, and 200 Simple Moving Averages – a development that normally brings in more bearish bets.
Meanwhile, the Relative Strength Index eased around 40 while the Awesome Oscillator registered 3 consecutive bars below equilibrium, meaning that chances of another standalone recovery were low.
Should the price decline below the immediate support of $0.817, Nov 10th’s swing low of $0.706 would likely come into play. One can expect MATIC to establish a foothold in this region since the same triggered a 52% rally between Nov 10-11.
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