Polygon has seen a significant increase in on-chain activity despite the bearish trend in the crypto space that led to the crash of MATIC.
While the price of Polygon (MATIC) may continue to struggle amid the weakness currently gripping Bitcoin (BTC) and the broader crypto market, analysts say the increase in on-chain activity indicates a potential turnaround for MATIC.
Data shows that Polygon’s network has seen an increase in both daily active addresses and dormant coin movement.
Increase in on-chain activity at Polygon
Santiment notes that Polygon has observed a significant increase in inactive MATIC coins. The platform points to the Age Consumed metric, an indicator that tracks the movement of inactive tokens by measuring how many long-held coins are moved between addresses.
Spent age data is a calculation that multiplies the number of coins transferred by the length of time since their last transfer.
Also notable is the sharp increase in daily active addresses. According to Santiment data, a total of 3,369 addresses interacted on-chain on Polygon while the Age Consumed metric skyrocketed. The number of active addresses was the second highest day of the year.
IntoTheBlock’s data also shows an increase in active addresses since August 26, with more than 1,000 new addresses on August 27.
What does this mean?
An increase in the Age Consumed metric often indicates a change in sentiment among long-term holders. Historically, this has coincided with notable price changes for the respective token.
Polygon is among the many networks that have seen their price drop since the crypto decline began in March. However, a significant increase in on-chain activity could be a sign that a MATIC reversal is imminent. Active addresses and dormant coin spikes are common signals that precede this.
Santiment wrote to X.
In Polygon’s case, the Age Consumed Value rose to 69 billion MATIC as the altcoin’s price fell amid the recent crypto weakness. The local top was around $0.58 and Polygon’s price is down 14% so far.
Despite this weakness, the two on-chain indicators suggest that investors could view MATIC’s decline as an opportunity to buy cheap.
