Polygon on-chain activity spikes despite MATIC price dip

Despite the bearish cryptocurrency sentiment dragging MATIC down, Polygon saw a notable increase in on-chain activity.

While the Polygon (MATIC) price may continue to struggle amid the weakness affecting Bitcoin (BTC) and the broader cryptocurrency market, analysts say that an increase in on-chain activity points to a potential comeback for MATIC.

Data shows that Polygon’s network has seen an increase in both daily active addresses and dormant coin movements.

Polygon on-chain activity spikes

Santiment notes that Polygon has witnessed a significant increase in dormant MATIC coins moving. The platform points to the Age Consumed metric, an indicator that tracks the movement of dormant tokens by measuring how long coins held between addresses move.

Consumed Age data is a calculation obtained by multiplying the number of coins in motion by the time since the last transfer.

The sharp increase in daily active addresses is also noteworthy. According to Santiment’s data, Polygon saw a total of 3,369 on-chain addresses interact, with the Age Consumed metric rising. The number of active addresses was the second highest of the year.

IntoTheBlock data also shows an increase in active addresses since August 26, with over 1,000 new addresses added on August 27.

Polygon MATIC new and daily active addresses table. Source: IntoTheBlock What does this mean?

An increase in the Age Consumed metric usually indicates a shift in sentiment for long-term holders. Historically, this has coincided with the price of that particular token witnessing significant changes.

Polygon has been one of many networks to decline since the crypto pullback began in March. However, a noticeable increase in on-chain activity could be a sign that a MATIC reversal is imminent. Increases in active addresses and dormant coins are common signals that precede this.

Santiment wrote about X.

In Polygon’s case, the Age Consumed metric skyrocketed to 69 billion MATIC as the altcoin’s price fell amid recent crypto weakness. The local peak for this was around $0.58, and Polygon’s price is down 14% year to date.

Despite this weakness, two on-chain indicators suggest that investors may view MATIC’s decline as an opportunity to buy low.