Polygon Labs, the company behind one of the most popular blockchains, Polygon, released the network’s whitepaper last month, which contained a proposal to roll out a new token called POL. The new crypto asset would replace MATIC. The developer behind Polygon blockchain believes that the move would help enhance decentralization along with community governance.
Since the announcement of the whitepaper on June 13, MATIC’s value has increased by more than 12%. According to data from Santiment, the price surge is largely fueled by whales’ activity. The blockchain analytics company reports that before June 13, MATIC only saw 61 huge transactions, but that figure had almost doubled (119) by June 18. For beginners, MATIC whales are investors who buy tokens worth over $100,000.
Although the MATIC price has dropped narrowly this week, the decline has not stopped the whales from purchasing more tokens. Santiment believes that these investors are aiming to enjoy the governance and staking benefits outlined in Polygon’s whitepaper.
The firm says if retail investors enter the market, then they may exact more buying pressure that could push MATIC to $1, a level it has not reached since late April.
Polygon Labs’ Token Transition Proposal Fuels Network Activity
Santiment’s report shows the MATIC to POL transition has driven up activity on the Polygon network. The firm’s data indicate that active addresses on Polygon were at $1.34 million on June 12, but that number raised to 1.45 million by June 19.
Despite MATIC’s price declining by 3.9% this week, active addresses have increased by 7%. Santiment says this is a bullish sign, and as the token transition gets closer, we may see the start of a significant rally in the coming days.
Santiment’s Price Prediction
Santiment predicts MATIC’s price to hit $1 ahead of Polygon’s token transition. However, the crypto asset must first overcome a tough barrier at $0.86. If the bears do not book profits at this level, then MATIC will easily reach $1.
But if the sellers do take profits at $0.86, MATIC could reverse to $0.71, where the buyers are likely to attempt staging another rally.
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