Polygon’s MATIC to POL Swap Fails to Boost Price, Down 61% This Year

Key Takeaways

• Polygon began its transition from MATIC to POL on Sep. 4.
• The MATIC price has fallen over 60% since the start of the year.
• Will MATIC begin a trend reversal, or does more downside await?

As of Sept. 4, POL will replace MATIC  as the native gas and staking token. MATIC holders can now swap 1:1 from MATIC to POL, this did not have any discernible effect on the price.

According to the team , POL will be the protocol token for the next generation, helping grow the Polygon ecosystem by increasing its security and scalability.

The team considers POL to be a third-generation token. To explain, Bitcoin (BTC) is a first-generation token, being a native token that does not give its holders any role in the protocol. Ethereum (ETH) is a second-generation token that allows holders to become validators and get rewarded.

As a third-generation token, POL also allows holders to become validators, with the added benefit of validating multiple chains and taking on multiple roles.

Despite its lackluster performance, let’s look at the MATIC price movement and see if it can stop the bleeding.

MATIC Price Struggles in 2024

The weekly time frame chart shows a decline since the $1.56 high in Feb. 2023. MATIC also created a lower high in March 2024 and accelerated its downward movement.

MATIC fell below the $0.52 horizontal area during this decline, validating as resistance (black icons). This was a critical loss since the area had previously provided support for over two years.

So, it could indicate that the MATIC price has started a new bearish trend.

Technical indicators are also bearish since both the MACD and RSI are falling. The MACD is negative, and the RSI is below 0.

While the MACD shows a gradually increasing momentum (black arrow), this is the only bullish sign amidst several bearish readings.

MATIC is approaching the $0.32 lows, which have stood since June 2022. If it breaks below them, there will be no more support until $0.10.

MATIC Fails to Sustain Breakout

The daily MATIC chart further adds to the bearish sentiment.

The price of MATIC broke out from a descending resistance trend line at the end of August and then briefly moved above the $0.52 resistance area. However, this movement could not be sustained (black circle).

Then, the decline took the price below the resistance trend line and close to its August lows, confirming the bearish deviation.

Similarly to the weekly time frame, the MACD and RSI are falling below their bullish thresholds.

So, the weekly and daily price actions both predict more downsides.

MATIC Struggles Could Continue

Despite its transition to POL, the MATIC weekly chart shows no bullish signs in the weekly or daily time frames. So, the ongoing downward movement that caused a 61% decline in 2024 could continue. A weekly close below $0.32 could greatly accelerate the rate of decrease.

About the Author

Valdrin Tahiri

Valdrin discovered cryptocurrencies while getting his MSc in Financial Markets from the Barcelona School of Economics in 2017. He has been an avid investor and trader since. Valdrin has written for several cryptocurrency media companies such as BeInCrypto and CoinGape.

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