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Ethereum’s largest scaling solution, Polygon, announced that the long-awaited migration of its MATIC token to $POL will take place on September 4.
On the same day, user activity on the Layer-2 (L2) network plummeted to multi-month lows.
Polygon Users Observe from the Sidelines
Polygonscan’s data show that on Sunday, the total number of transactions recorded on the Polygon Proof-of-Stake (PoS) chain was 2.44 million, representing the L2’s lowest since December 2023.
When a network sees a decline in transaction count, it suggests fewer users are active. In Polygon’s case, uncertainty surrounding MATIC’s upcoming migration to $POL may be causing users to delay transactions until the transition is complete.
MATIC’s muted price performance reflects the network’s recent drop in activity, with the altcoin trading at $0.41, up just 3% in the last 24 hours. Despite a 27% increase in trading volume, totaling $142 million, uncertainty surrounding MATIC’s transition to $POL has contributed to the slowdown.
However, Polygon’s DeFi sector remains resilient. On Sunday, both the network’s total value locked (TVL) and trading volume on decentralized exchanges (DEXes) saw a notable spike, signaling continued interest despite the broader dip in transaction activity.
Read more: 15 Best Polygon (MATIC) Wallets in 2024
According to Artemis’ data, its TVL rose 5% to $859 million that day. Also, daily trading volume on the DEXes housed within the L2 increased by 21%. As of this writing, Polygon’s daily DEX trading volume is $69 million.
MATIC Price Prediction: Demand Trickles in
Although MATIC has failed to record any considerable surge in value post-Polygon announcement, there has been a notable spike in buying activity on its 12-hour chart. As of this writing, the token’s Relative Strength Index (RSI) is in an uptrend and is poised to cross above the 50-neutral line.
This attempt to cross the center line indicates that buying pressure is increasing. It signals that MATIC is transitioning from a slightly bearish to a more neutral or somewhat bullish momentum.
Read more: Polygon (MATIC) Price Prediction 2024/2025/2030
If this buying pressure gains momentum, the token’s price may rise to a 30-day high of $0.55. However, it may fall to $0.33 if the market trend shifts from positive to negative and selling activity skyrockets.