Polygon has seen a significant increase in on-chain activity despite the bearish reversal in cryptocurrencies that has seen MATIC decline.
While the price of Polygon (MATIC) may continue to struggle amid the weakness currently surrounding Bitcoin (BTC) and the broader crypto market, analysts say the surge in on-chain activity points to a potential reversal for MATIC.
Data shows that the Polygon network has seen a sharp rise in both daily active addresses and idle coin traffic.
Polygon Chain Activity High
Santiment notes that Polygon has seen a significant spike in the number of dormant MATICs as it moves. The platform points to the Age Consumed metric, an indicator that tracks the movement of dormant tokens by measuring the number of long-held coins moving across addresses.
Consumed age data is a calculation that multiplies the number of coins in motion by the amount of time since they were last moved.
Also noteworthy is the sharp increase in daily active addresses. According to Santiment data, a total of 3,369 on-chain addresses interacted with Polygon as the age metric increased. The number of active addresses was the second highest day of the year.
IntoTheBlock data also shows a significant increase in active addresses since August 26, with over 1,000 new addresses on August 27.
What does this mean?
A rise in the spent age metric often indicates a shift in sentiment among long-term holders of the coin. Historically, this has coincided with significant changes in the token price.
Polygon has been among the many networks that have seen a decline since the cryptocurrency downturn began in March. However, a noticeable increase in on-chain activity could be a sign that a MATIC reversal could be imminent. Active addresses and dormant coin spikes are common signals that precede this.
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In the case of Polygon, the spent lifespan metric rose to 69 billion MATIC as the altcoin’s price fell amid the latest crypto weakness. The local high on this was around $0.58, and Polygon’s price is down 14% year to date.
Despite this weakness, the two on-chain indicators suggest that investors may view the MATIC decline as an opportunity to buy low.