The crypto market crash on May 5 caused the price of Polygon (MATIC) to drop below $0.9 for the first time since January. But the recent global NFT product launch Sotheby’s seems to have attracted the interest of online investors. Is this enough to validate the bullish MATIC price prediction?
On May 1, 2023, Sotheby’s, one of the world’s largest collectors and handicraft brokers, announced its decision to launch NFT on Polygon and the Ethereum network.
The product launch will allow investors to sell secondary NFT artwork peer-to-peer.
Less than a week after Sotheby’s launched the NFT, demand for Polygon is growing and attracting new users. Therefore, there is a possibility that MATIC price will break out of the current downtrend.
Polygon is attracting new users
Network growth tracks the number of new wallet addresses created on the blockchain. After a sharp drop in April, the Glassnode chart below shows Polygon Network growing 51% between May 6 and May 10, from 419 new wallet addresses to 633 new wallet addresses.
Growth rate of Polygon Network | Source: glass node
Polygon is a popular blockchain network for NFT transactions due to its low fees and fast transaction times. Not surprisingly, recent on-chain data shows an increase in the number of new users joining the Polygon network.
If this trend continues, demand from new users could validate the bullish MATIC forecast.
MATIC demand is growing
Additionally, the influx of new users also appears to have boosted investor demand for MATIC. The exchange consolidated order book shown below shows that MATIC buy orders have now exceeded market supply.
Investors are currently placing buy limit orders for 23 million MATIC. However, to confirm their bullish stance, Polygon traders only placed 17.5 million tokens around the current price.
General Exchange Order Quantity | Source: enter the block
The exchange market depth indicator aggregates all limit orders placed by a given token holder on recognized exchanges. Due to the current excess demand of 5.5 million MATICs, prices are likely to increase as buyers begin to compete.
Taken together, if network growth continues upwards, demand could be even higher. Finally, the bullish MATIC price prediction might be confirmed.
MATIC Price Prediction: Cow Concern 0.97 Dollar
Based on the in/out money data below, MATIC price could rally towards $0.97. But for the bulls to believe in the positive price forecast, the resistance at $0.92 must first be broken.
At that point, 28,000 investors who paid an average of $0.92 can sell some of their 676 million tokens. However, this cluster represents a major resistance level that bulls must overcome before the price can continue to rise.
But if the bullish forecast is confirmed, the rally could reach $0.97 before facing stronger resistance. The $0.97 price point indicates that a large number of holders entered the market.
This cluster holds over 4 billion tokens. At the current average price of $0.84, this equates to over $3 billion.
IOMAP data | Source: enter the block
Conversely, if MATIC prices break below initial support around $0.83, the downtrend could last longer than expected. However, a buy wall of 14,700 investors who bought 204 million tokens at a floor price of $0.84 may prevent the downside.
While unlikely, failure to hold this support could lead to a further decline for MATIC towards $0.76.
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According to Beincrypto