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Polygon's native token MATIC is one of the top gainers in the altcoin markets on Thursday following a recent recovery run. The token is trading 24.05% in the green today, with its price up to $0.515 at the time of writing, as per CoinMarketCap. Notably, the MATIC/USD pair is up 30.76% in the last seven days and 62.50% since crashing to a 14-month low of $0.32 less than five days ago.
The price ascent comes as Bitcoin and most altcoins consolidate after shedding significant value earlier this week. The crypto market saw more sell-off this week, with many tokens crashing deeper from the ATHs. MATIC, which climbed above 0.50% today, is trading about 82.50% below its record-high printed almost six months ago.
Whale accumulation and carbon-neutrality milestone fuelling the surge
The gains have been partially propelled by accumulation activity in the market.
On-chain data by Santiment shows that deep-pocketed investors have been acquiring more MATIC tokens amid bearish sentiment. The analytic's firm today observed that the balances of holders with 10,000 to 10 million MATIC tokens have collectively swelled by 8.7% over the last six weeks. Markedly, the native token on Polygon lost more than half its value during this period.
‘Whales' tracking platform WhaleStats also revealed on Tuesday that an Ethereum whale purchased 10,000,000 tokens valued a $4,226,890.
Another possible reason for the surge is news shared by Polygon pertaining to its sustainability goal. The Ethereum scaling solution this week revealed in a blog post that it had achieved carbon neutrality thanks to a partnership with KlimaDAO, which involved the latter offsetting carbon credits. The achievement represents the first phase of the long-term goal of becoming carbon-negative before next year. The bullish news coincided with the period over which MATIC/USD has gained and recovered above $0.50.
Polygon co-founder, Sandeep Nailwal, called out entities in the blockchain space that have done nothing but pledge to stop worsening the situation. Further, the Polygon executive also urged others to follow in taking action in a statement shared alongside the news.
An impending rally or false recovery
MATIC bulls could attempt to lock support at current prices and eye new heights by maintaining the rebound and defending gains from the broader market bearish course. The technical analysis of MATIC's price action suggests a breakout that could potentially push MATIC prices to higher grounds towards the end of the month or early next month.
However, crypto experts warn that the signals could be hinting at false recovery. For starters, the accumulation by the wealthy class of holders doesn't necessarily imply an imminent bull run. This group of investors could settle for minor profits as soon as the price takes off especially considering the general market sentiment is still negative.
Also worth noting, the technical analysis may also not pan out as projected, so traders eyeing entry might need to watch out for a clearer bullish signal.
Even as MATIC/USD eyes another green candle to higher grounds, some indicators warn that the native token on Polygon is not yet on the clear. CryptoQuant data shows that MATIC balances on exchanges have increased in the last five weeks (since May 16) with only occasional dips. Polygon's exchange reserve has grown by almost 160 million during this period. The rise in exchange balances could create a selling pressure buildup in the short term, which will likely hurt MATIC's price in the end.
To learn more about Polygon visit our Investing in Polygon guide.
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Sam is a financial content specialist with a keen interest in the blockchain space. He has worked with several firms and media outlets in the Finance and Cybersecurity fields.