What MATIC’s exclusion from a Grayscale fund might mean for its price

• MATIC has been removed from Grayscale’s GSCPxE Fund
• Decision could be a product of the altcoin’s month-long downtrend on the charts

Grayscale Investments has announced adjustments to its fund components after Q2 of 2024. Grayscale Investments is the largest crypto assets manager in the world and controls various components, including GSCPxE, OTCOX: GDLC, and OTCQB: DEFG. After the second quarter review, they have updated fund component weights for every product. CSIMarket announced the development through the X official page, reporting that,

“Grayscale Investments Rebalances Crypto Funds to Meet Investor Demand for Diversification: $GBTC Grayscale Investments Announces Rebalancing of Crypto Funds for Second Quarter 2024.”

According to the aforementioned update, GDLC tokens remained unchanged with assets such as BTC, ETH, SOL, XRP, and AVAX enjoying weights of 70.46%, 23.51%, 3.86%, 1.54%, and 0.63%.

MATIC removed from Grayscale GSCPxE

However, based on the Coindesk Smart Contract Platform Select ex ETH Index, various adjustments were made to the GSCPxE. The adjustments included selling Polygon (MATIC), while also spending the earnings to purchase existing fund components, as per their weights.

Accordingly, MATIC was removed from the GSCPxE Fund. These adjustments were made to adhere to prevailing market trends, while ensuring flexibility for each asset based on their weights.

Impact of adjustment on MATIC’s price

At press time, MATIC was trading at $0.4778 after hiking by 8.5% in 24 hours. At the same time, the market cap appreciated similarly to hit $4 billion on the charts.

On the contrary, trading volume fell by 39.74% to $292 million over the last 24 hours. This, on the back of the altcoin’s weekly price decline too.

Source: Coinglass

Equally, AMBCrypto’s analysis revealed that MATIC has been at the receiving end of a strong bearish trend.

For starters, our analysis of Coinglass suggested that MATIC has ridden through high liquidation levels. The last 6 days, especially, saw higher long position liquidations, with numbers such as $870k, $1.6M, and $1.5M seen consecutively.

High liquidations for long positions mean the prices decline was contrary to investors’ expectations, pushing them to close their positions.

Source: Tradingview

Finally, as far as the Directional Movement Index is concerned, the negative index (42) sat above the positive index at 7.6. When the DMI is set up in such a manner, it’s a bearish signal. Simply put, selling pressure seemed to outweigh demand on the charts.

Source: Santiment

Additionally, the DAA Divergence at -40.99 indicated that the price may be moving opposite the activity level. This could be a sign of weaker market interest, making the price direction unsustainable unless user activities climb.

Can MATIC recover?

At the time of writing, MATIC looked likely to be in a bearish trend, until it breaks above its 200 MA. Thus, if the trend continues, the prices will decline to $0.42.

However, if gains on the daily charts are maintained, the market will see a trend reversal and climb to the next resistance level of around $0.5.