Polygon (MATIC) price is approaching the danger zone, down 5% on the day, with key indicators predicting another 20% loss. At the same time, Bitcoin Cash (BCH) price also lost the critical $200 support. Is the worst over for the altcoin market?
MATIC price enters danger zone
Ranked 13th by market cap, MATIC has been declining since July 2022. The main development that triggered the sale was the SEC’s listing of MATIC on its securities list. As we reported as Kriptokoin.com, the Polygon team announced that it will be branded with a new altcoin named POL after the SEC pressure.
On-chain metrics show that Polygon network has entered a permanent downtrend in terms of growth amid the Fud news. According to data from Glassnode, New Addresses registered on Polygon recently dropped to two-year lows. The altcoin registered only 527 new addresses on August 20. Meanwhile, the Polygon network last saw fewer than 530 addresses in February 2021.
The number of new wallet addresses per day informs investors about the adoption level of the altcoin network. The number of new addresses of MATIC fell to the lowest levels of the last 2 years. This indicates that Polygon’s growth has stabilized in the second half of 2023. However, alternative L2 networks such as Optimsm, Arbitrum and Base have been outperforming in recent months, gaining new users.
Altcoin investors prepare for further declines
MATIC traders are gearing up for more selling action in the coming days, further confirming the bearish trend. As shown below, the altcoin withdrawn against those who deposited MATIC on the exchanges on August 21 exceeded 8.41 million. This is very important because MATIC hit 23.42 million on July 17, the last time Exchange Netflow had surpassed 8.4 million. It triggered a 15% pullback in MATIC prices, especially until the end of the month.
Meanwhile, the negative performance of MATIC price throughout 2023 has driven 95% of altcoin investors into losses. Technically speaking, the altcoin is still in bearish danger. Specifically, the break of $0.5 will invite the bears back onto the scene. The good news is that this level also represents a strong support zone. As seen below, 1,560 addresses bought 2.35 million Polygon at an average price of $0.52.
On the bullish side, if the altcoin price manages to reach the $0.65 region, buyers will be looking forward to a fresh move. However, if 43,200 addresses buy 64 million MATIC at a maximum price of $0.58, there will be significant resistance. Still, if this resistance collapses, the well-established altcoin could reclaim $0.65.
Bitcoin Cash (BCH) price lost $200
BCH’s weekly timeframe technical analysis shows that the price broke out of the long-term descending resistance line in January. Before the explosion, the line was in service for 623 days. BCH, which initially had a hard time maintaining its bullish momentum, turned bullish in June. Meanwhile, it reached the yearly high of $329. However, the altcoin has been declining since then. The price definitively broke $200 on August 17.
According to technical analyst Valdrin Tahiri, the closest support zone of the downside move is at $150. This support means a 20% decrease from the current price. On the other hand, a 60% increase will be required to reach the $300 zone again.
Analysis of the daily time frame provides a mixed outlook. On August 17, BCH jumped to the support line of the channel (green icon), forming a long lower wick. Shortly after, it retraced the 0.618 Fib retracement level at $181. If the price stays above this level, an exit from the channel will be expected. In this case, a 60% increase could occur to the $300 resistance area.
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