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Polygon (MATIC) Fails to Rebound After Being Labeled Security by SEC

dailycoin.com 07 June 2023 08:30, UTC

Polygon (MATIC) has yet to recover from the initial dump after the SEC labeled it a security.
MATIC fell to levels not seen since January 2023.
A whale might be responsible for the failed recovery.

The U.S. Securities and Exchange Commission (SEC) named many crypto coins securities in its lawsuits against Binance and Coinbase. One of them is Polygon’s native token MATIC.

However, right after the second lawsuit against Coinbase, all crypto tokens rallied and erased previous losses, including those labeled as securities. MATIC, though, failed to recover.

Polygon (MATIC) Fails to Recover After SEC Security Comments

Polygon’s native token MATIC has again fallen out of the top 10 cryptocurrency list. This time, MATIC failed to recover after the initial dump following the SEC’s lawsuits against Binance and Coinbase.

MATIC is currently trading at $0.78, down 4.9% on the day and 11.4% in the past seven days, according to data from CoinGecko. This is the first time since early January of this year that MATIC fell below the $0.80 mark.

One reason for the failed recovery might be a whale that presumably sold millions of dollars worth of MATIC a day ago.

According to blockchain analytics firm Santiment, someone transferred 115.3 million MATIC, worth around $95 million at the time of transfer, from a cold wallet to Binance. This potentially increased selling pressure, preventing MATIC from rebounding like other tokens did.

📊 Although many assets enjoyed a solid rebound day, $MATIC has hit a wall of late. The latest setback appears to be a $95M transfer from a whale cold wallet to #Binance as the #10 market cap asset fell below $0.80 for the first time since January 6th. https://t.co/7i2FJI1yIP pic.twitter.com/VHo7FjYV72
— Santiment (@santimentfeed) June 7, 2023

Solana (SOL), MATIC’s neighbor in the top 10 cryptocurrency list, reentered again. SOL has over $600 million more in market capitalization than MATIC.

On the Flipside

MATIC has remained one of the best-performing digital assets in the last year or so. It’s up by around 31% in the past year.

Why This Matters

Polygon’s MATIC is one of the most sought-after tokens in the crypto market. It’s surprising to see whales sell millions of tokens, especially when Polygon is developing multiple Ethereum scaling solutions like Polygon zkEVM. However, one reason for the selling might be that Polygon will do an additional airdrop for Polygon zkEVM users.