Despite Polygon’s activity milestone, why MATIC is suffering

• Polygon network consistently surpassed 1 million daily active addresses for 65 days.
• TVL and DEX volumes declined.

Polygon [MATIC] continued to attract a large amount of users over the last few months. Not only was the ecosystem able to attract users, but it was also able to retain them.

Polygon activity on the rise

The Polygon network maintained a record of more than 1 million daily active addresses for 65 days straight, according to recent data.

Source: X

Despite this, in terms of DeFi, Polygon struggled. Overall, DEX (Decentralized Volumes) fell from $320 million to $50 million over the last few weeks.

Moreover, the TVL (Total Value Locked) for Polygon fell significantly from $1.2 billion to $980 million.

Source: Artemis

These factors impacted the revenue generated by the Polygon network significantly. AMBCrypto’s analysis of Token Terminal’s data revealed that the revenue generated by 42% over the last month.

Likewise, Development Activity fell by 14% n the last 30 days.

Source: Token Terminal

If the number of code commits on the network continue to decline, it can have a significantly negative impact on the Polygon network.

The token didn’t have a positive time in terms of price movement as well. Since the 9th of April, the price of MATIC declined, showcasing multiple lower lows and lower highs.

This pattern suggested that a bearish trend had been established. Despite MATIC’s multiple attempts to break the trend, the price remained consolidated between $0.7802 and $0.6346 levels.

The price would need to retest and weaken the $0.7802 resistance level before a reversal can be seen.

The RSI (Relative Strength Index) had fallen materially during this period, implying that the bullish momentum around MATIC had weakened.

On the plus side, the CMF (Chaikin Money Flow) had grown, which indicated that the money flowing into MATIC had surged.

At press time, MATIC was trading at $0.7191.

Source: Trading View

Realistic or not, here’s MATIC’s market cap in ETH terms

Holders see green, token sees red

The Network Growth for MATIC had also fallen in the last few days, indicating a lack of interest from new addresses.

Its MVRV ratio also witnessed a rise, which suggested that most holders were profitable and could have an incentive to sell their tokens further down the line.

Source: Santiment