Amid a new phase of regulatory attacks in the U.S., some tokens labelled as “securities” are under severe pressure. Tens of thousands of MATIC holders are now underwater,a seasoned trader warns.
Polygon (MATIC) price below crucial level, sell-off expected?
The price of MATIC, a core native asset of the Polygon network, slipped below a crucial supply zone, as noticed by a pseudonymous trader who goes by @ali_charts in Twitter. This paramount price zone, for over 14,000 traders, is situated between $0.84 and $0.86, IntoTheBlock data says.
$MATIC has slipped below a crucial supply zone, spanning $0.84 to $0.86. In this range, 14,240 addresses hold over 4.13 billion #MATIC.
The longer the #Polygon price remains below this zone, the higher the likelihood that these holders might start selling to avoid incurring… pic.twitter.com/fc7eOmjOYp
— Ali (@ali_charts) November 23, 2023
More than 4.13 billion of MATIC tokens belong to traders who purchased MATIC in this zone. As such, every day spent by the MATIC price in sub-$0.84 waters increases the possibility of a sell-off.
More and more traders will be considering their MATIC bags on current prices to cut their losses, the trader said to his 33,000 followers:
The longer the Polygon price remains below this zone, the higher the likelihood that these holders might start selling to avoid incurring significant losses.
Per IntoTheBlock data, over 81.5% of MATIC now belongs to holders who bought them at higher prices. Only 18% of MATIC is “In the Money.”
The next crucial zone for MATIC distribution is situated between the $0.75 and $0.77 levels, data says.
Regulatory attacks might stay behind double-digit MATIC price drop
In the last seven days, the price of MATIC lost 13.45%. On Nov. 20, 2023, it dipped to a three-week low at $0.72 after a rapid decline.
Most likely, this drop is associated with another phase of legal battles between U.S. watchdog the SEC and the largest centralized exchanges. On Nov. 20, the SEC charged Kraken, one of the oldest CEXes, with operating a crypto trading platform as an unregistered securities exchange, broker, dealer and clearing agency.
Together with Solana (SOL) and Cardano (ADA), Polygon (MATIC) is one of the largest tokens that are typically labelled as securities by SEC.
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