This is how bearish whales threaten MATIC’s bullish potential, is a 10% plunge underway?

Polygon MATIC price is trading with a bearish bias in lower timeframes, but bulls are leading in the higher timeframes. The network has recorded strong retail demand and market reaction following the Polygon zkEVM product launch, which is expected to enhance privacy and increase transaction throughput on the Ethereum-compatible network. However, on-chain data indicates that crypto whales need more convincing for a strong uptrend to hold.

MATIC price risks a 10% downswing

MATIC price is trading below the $1.20 level for the second week in a row, putting pressure on the $1.00 support level. The altcoin is trapped within a formidable supplier congestion zone, upward due to the 50-day Exponential Moving Average (EMA) at $1.11 and downward due to the 200-day EMA at $1.03.

If buyer momentum drops, bears could take over, causing MATIC price to drop and lose the support level provided by the 100-day EMA at $1.09 before revisiting the March 27 lows above the 200-day EMA at $1.03.

In the dire case, MATIC price could plunge further and tag the $1.00 support level, denoting a 10% price drop from current levels. This would be the ideal bouncing level for the altcoin, although, in highly bearish conditions, the token could shatter the aforementioned support level and tag the $0.91 support level.

MATIC/USDT 12-hour chart

Bearish whales threatening Polygon’s bullish potential, on-chain metric shows

A strategic cohort of MATIC whales has been booking profits since late February. The orange and blue bars below show how the cluster of whales holding over $100,000 and over $1 million MATIC, respectively, have been depleting their balances since late February.

This means that Polygon whales have intensified the sell-off, with approximately 26 million coins worth $30 million sold in the last week. Should the whale sell-off ensue, MATIC price could struggle to solidify a bullish trajectory in the coming weeks. 

Similarly, the number of whale transactions recorded has reduced by over 50% since mid-February. While only 266 MATIC transactions recorded worth over $100,000 at the end of Feb 17, as of March 28, the figure is down to 120. Notably, a drop in large transactions precedes an incoming slump for MATIC price. 

Still, if buyer momentum increases, MATIC price could breach the resistance level presented by the 50-day EMA at $1.14. A daily candlestick close above this level will invalidate the bearish thesis.

Northward, MATIC price could reach up for the next roadblock at $1.20 or tag the $1.30 resistance level in highly bullish cases.