On-chain data shows the Polygon exchange supply has seen a sharp spike recently, something that could lead to a further downtrend for the asset.
Polygon Exchange Supply Rises As Whale Makes 60 Million MATIC Deposit
According to data from the on-chain analytics firm Santiment, around 7.92% of the entire MATIC circulating supply is on exchanges now. The relevant indicator here is the “supply on exchanges,” which measures the percentage of the total Polygon supply that’s currently being stored in the wallets of all centralized exchanges.
When the value of this metric rises, it means the investors are currently depositing a net number of coins into exchanges right now. Since one of the main reasons why holders may transfer their MATIC to these platforms is for selling-related purposes, this kind of trend can have bearish implications for the price of the cryptocurrency.
On the other hand, decreasing values of the indicator imply withdrawals are taking place on exchanges currently. Such a trend may be a sign that investors are accumulating the asset at the moment, and hence, can be bullish for the price in the long term.
Now, here is a chart that shows the trend in the Polygon supply on exchanges over the last few months:
The value of he metric seems to have sharply risen in recent days | Source: Santiment on Twitter
As displayed in the above graph, the Polygon supply on exchanges (colored in red) has seen a sharp jump during the past day, suggesting that these platforms have received a large amount of the asset.
In total, this inflow spike saw around 60 million MATIC entering the wallets of the exchanges. The source of this deposit looks to have been a single whale entity, which is in fact one of the largest holders of the cryptocurrency.
The cryptocurrency transaction tracker service Whale Alert has also caught the transfer and has revealed that the transaction was coming from a wallet attached to the Polygon staking service, and its destination was the cryptocurrency exchange Binance.
🚨 🚨 🚨 60,000,000 #MATIC (59,472,041 USD) transferred from Polygon Staking to #Binancehttps://t.co/2m1PJNgY2a
— Whale Alert (@whale_alert) April 24, 2023
After this inflow, the MATIC supply on exchanges has risen to around 7.92%, which is a five-week high for the indicator. From the chart, it’s visible that this spike has only come after the cryptocurrency’s price has taken a sharp hit.
Generally, whales make such deposits to sell when prices are high. However, the odd timing of this deposit may be a sign that this humongous holder thinks the decline would only extend in the near term, hence why they have decided to sell here.
This would only be true, of course, if the whale truly intends to sell with this deposit. It’s possible that the transfer has only been made to utilize some of the other services offered on platforms like these, in which case, the price would probably feel only a neutral effect from the deposit.
At the time of writing, Polygon is trading around $0.96, down 17% in the last week.
Looks like the value of the asset has tumbled down recently | Source: MATICUSD on TradingView