Polygon's Price Slides Below Key Supply Zone Amid Elevated Gas Fees

Renowned crypto market analyst Ali Martinez, known for his astute observations on digital currency trends on platform X, has brought to light a critical juncture in the trajectory of Polygon’s (MATIC) valuation. Martinez’s latest analysis revealed that MATIC has descended beneath a pivotal supply zone, situated between $0.84 to $0.86.

$MATIC has slipped below a crucial supply zone, spanning $0.84 to $0.86. In this range, 14,240 addresses hold over 4.13 billion #MATIC.

The longer the #Polygon price remains below this zone, the higher the likelihood that these holders might start selling to avoid incurring… pic.twitter.com/fc7eOmjOYp
— Ali (@ali_charts) November 23, 2023

Within this range, an aggregated holding of over 4.13 billion MATIC is owned by approximately 14,240 addresses. The chart by Martinez shows that MATIC is in a risky situation. The more time it spends below a specific price level, the more likely investors holding MATIC will sell their shares to avoid more significant losses.

The current market dynamics for MATIC are particularly intriguing. Martinez’s analysis indicates a tangible risk of sell-off pressure if the price does not recover above the noted supply zone. This situation is exacerbated by recent market activities, including a surge in gas fees caused by a frenzy of minting activities for an Ordinals-inspired token, POLS, which has led to an unprecedented increase in transaction fees on the Polygon network.

The escalated gas fees, which recently peaked at $0.10, correlate with a rush to mint the new POLS token. The surge in fees and network activity may also be a repercussion of a new NFT collection launched on Polygon, as observed by the network’s founder, Sandeep Nailwal. This heightened activity has utilized over 102 million MATIC tokens, valued at $86 million, for transaction fees alone.

Adding to Polygon’s eventful week, the city of Lugano, Switzerland, has integrated Polygon into its MyLugano payment app. The move aims to offer its 30,000 users a seamless multi-chain cryptocurrency wallet experience and access to various decentralized applications (dApps). Alongside this technological leap, the city has also embraced a new form of digital asset based on ICP technology and launched an innovative NFT collection linked to the artwork of Yuri Catania.

Despite these developments, MATIC’s market valuation has seen fluctuations. According to CoinGecko, MATIC is priced at $0.777096, with a 24-hour trading volume of $440,780,438.39, marking a 2.89% increase on the day, yet a 16.62% decline over the last week. With a circulating supply of 9.3 billion, Polygon’s market cap is currently valued at $7.19 billion.