Polygon (MATIC) In Buy Zone That Earlier Led To 112% & 87% Surges
08 April 2024 - 6:00PM
NEWSBTC
On-chain data shows Polygon (MATIC) is currently inside the same
buy zone that earlier led to rallies of around 112% and 87% for the
asset. Polygon 30-Day MVRV Ratio Is Significantly Negative
Currently As pointed out by analyst Ali in a post on X, MATIC is
showing a historically bullish pattern in its 30-day MVRV ratio.
The “Market Value to Realized Value (MVRV) ratio” here refers to an
on-chain indicator that keeps track of the ratio between the
Polygon market cap and realized cap. The realized cap is a
capitalization model that calculates the total valuation of the
cryptocurrency by assuming that the “real” value of any coin in
circulation isn’t the current MATIC spot price, but rather the
price at which it was last transferred on the blockchain. Related
Reading: Dogecoin Whale Takes $52.3 Million In DOGE Off Binance,
Sign Of Buying? Considering that the last movement of any coin was
the last time it changed hands, the price at its time would serve
as its current cost basis. As such, the realized cap essentially
sums up the cost basis of every coin in circulation. Put another
way, the realized cap is a measure of the total amount of capital
the investors have put into the asset. Since the MVRV ratio
compares the value the holders are carrying right now (that is, the
market cap) against this initial investment, its value can tell us
about the profit-loss status of the market as a whole. Now, here is
a chart that shows the trend in the 30-day version of the Polygon
MVRV ratio, which tells us about the profit-loss balance
specifically for the investors who bought within the past month:
The value of the metric seems to have been quite low in recent days
| Source: @ali_charts on X In the graph, the 30-day MVRV ratio has
been displayed in terms of a percentage, with the 0% mark aligning
with the scenario where the market cap and realized cap are equal.
It’s visible that the indicator has registered some steep drawdown
for Polygon recently and has dipped deep inside the negative
territory. This would imply that the investors who bought within
the last 30 days have entered into notable losses. The latest
levels of the metric have been low enough to qualify for a zone
that has provided profitable buying opportunities in the past.
“Historically, the last two entries into this zone saw MATIC surge
by 112% and 87%,” notes the analyst. Related Reading: Polygon
Observes Buy Signal: Analyst Suggests MATIC Rebound To This Level A
possible explanation behind this pattern could be the fact that as
these 30-day investors enter into losses, the selling pressure in
the market goes down as there aren’t many profit-takers left. This
naturally facilitates for bottoms to take place. It now remains to
be seen whether this past pattern would repeat for Polygon this
time as well, and if it does, whether any resulting surge would be
of a similar scale or not. MATIC Price Polygon has registered a 3%
surge in the past day, with its price now floating above $0.93.
Given the timing, it’s possible the MVRV ratio buy signal may
already be in effect. Looks like the price of the coin has shot up
over the past day | Source: MATICUSD on TradingView Featured image
from GuerrillaBuzz on Unsplash.com, Santiment.net, chart from
TradingView.com
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