Despite the initial optimism around the MATIC to POL token migration, Polygon’s native crypto POL faced a sharp decline in late September.
While Bitcoin and the broader crypto market ended September month on a positive note, Polygon’s native crypto POL (ex-MATIC) faced a few challenges. Despite the initial optimism surrounding the ecosystem’s token swap, the POL price deviated from the broader bullish sentiment last month.
The Ethereum Layer-2 scaling network implemented an upgrade in early September while migrating from the MATIC to the POL tokens, with the goal of boosting utility and flexibility. However, despite the excitement surrounding this milestone, POL saw a reversal in its gains during the final week of the month.
Courtesy: Trading View
Over the past week, POL price came crashing down all the way from $0.446 on 28th September to $0.3775 as of press time. POL price is trading 6.6% down with the daily trading volumes surging 56% to $127 million.
The bearish POL performance in September last month was in stark contrast to Bitcoin and several other altcoins. Bitcoin ended the month at nearly 8% gains making it the best-performing September in over a decade. Historically, September has been the month of negative returns for Bitcoin and altcoins, however, with the Fed rate cuts and monetary stimulus, the broader market outperformed everyone’s expectations.
On the other hand, POL’s decline is particularly worrisome, as data from IntoTheBlock shows that up to 95% of token holders are facing unrealized losses. This includes 81% of long-term holders, who have held the token for a year, during which time POL has dropped 37% in value.
Polygon Recent Milestones and POL Price Action
Last week, the Polygon blockchain activated the Ahmedabad hardfork on its Proof-of-Stake (PoS) mainnet following a two-week testing period on the Amoy testnet. This was a crucial step in Polygon’s roadmap leading to three Polygon Improvement Proposals, i.e., PIP-30, PIP-36, and PIP-45.
These proposals introduce several optimizations to the PoS chain while primarily focusing on improving the experience of developers as decentralized application (dApp) users. For example, PIP-30 increased the maximum code size from 24KB to 32KB. This allowed dApp builders to execute complex contract deployments and other logic. Similarly, the PIP-36 handles the issue of stuck bridge transactions while making it possible to replay failed state syncs.
On the POL/USDT 4-hour chart, the Relative Strength Index (RSI) briefly recovered from the oversold zone it hit on Monday, only to dip again. As of writing, the RSI stood at 30.61. The 200-day Simple Moving Average (SMA) crossed below the 100-day SMA on September 28, after already falling below the 50-day SMA the previous day.
Courtesy: TradingView
These crossovers signal weakening momentum, suggesting that POL’s price is likely to remain under downward pressure in the near term.
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