The price of Polygon (MATIC) dropped by 8% on Thursday following the Fed’s announcement of a rate pause, which triggered a new wave of sell-offs. With whale investors losing confidence, the chances of a MATIC price recovery in the coming weeks are uncertain.

Polygon (MATIC) has been experiencing a downward trend in June, with another 8% correction on Thursday. The on-chain data of the Polygon network is also showing multiple red signals, raising concerns about an early recovery.

MATIC Whales are Taking Bearish Positions

In the previous week, crypto whales took advantage of the low prices to accumulate more MATIC. However, this week has seen a change in their behavior.

From June 10 to June 15, there has been a persistent drop in large transactions across the Polygon network. Specifically, the number of large transactions reduced by 220%, going from 289 to 90 transactions.

The metric that tracks the trading activity of whale investors, known as “Large Transactions,” shows a positive correlation between whale trading activity and price due to the market liquidity they provide and their buying power. However, the recent trend indicates that large institutional investors may be losing confidence in MATIC’s price recovery prospects.

Polygon Network Appears Overvalued Despite Price Correction

Another concerning factor is the significant increase in Polygon’s Network Valuation to Transaction Volume (NVT) ratio. This suggests that more bearish days may lie ahead for MATIC’s price. The NVT ratio compares a network’s market valuation to the volume of transactions involving its native token.

According to the Glassnode chart, the MATIC NVT ratio has been rising since June 10, reaching a 420% increase from 15.79 to 84.56 between June 10 and June 15.

The NVT ratio reflects the relationship between a cryptocurrency’s market capitalization and the level of transactional activity. An increase in the ratio indicates that the asset is currently overvalued, further adding to the bearish concerns among whale investors regarding MATIC’s price recovery chances.

MATIC Price Prediction: Further Downswing Below $0.50

The bearish sentiment among whale investors suggests that the MATIC price is likely to drop towards $0.50. However, according to IntoTheBlock’s In/Out of the Money Price (IOMAP) distribution data, there is expected to be bullish support around $0.60.

At this level, there are approximately 3,800 addresses that bought 4.49 billion MATIC coins at an average price of $0.59, creating a buy-wall of support.

If the support at $0.60 fails, it is likely that the MATIC price will further decline towards $0.50.

However, if the price manages to break above $0.65, around 4,340 investors who purchased 137.6 million coins at the maximum price of $0.65 could provide resistance. If this resistance level does not hold, the bulls may push the MATIC recovery towards $0.70.