A large number of coins followed in the footsteps of Bitcoin and joined yesterday. However, when the real coin price took a break and started to “cool down” around $ 62k, most of the highs took a step back.
However, MATIC remained the only alternative [apart from NU] of the top 100 that continued to reflect two-digit 24-hour appreciation numbers even as of this writing.
After witnessing its own part of consolidation in recent months, MATIC finally changed its "consolidation" narrative yesterday by recording a massive green candle on its price chart. After opening at $ 1.2 on Friday, MATIC managed to close around $ 1.6, a level last seen on September 7.
The Ethereum-MATIC link
MATIC has followed in the footsteps of Ethereum during most of the uptrend / downtrend phases. Consider this: In May, when Ethereum was creating new highs on a daily basis, MATIC rallied 350% [from $ 0.6 to over $ 2.7] in just two weeks. In particular, during that same period, Bitcoin was trending down on its price chart.
However, Ethereum development has managed to notice an increase of less than 1% during the last day. Therefore, it can be argued that the relationship that MATIC shares with ETH is gradually fading.
Although the aforementioned argument may seem true for now, it should be noted that it will not hold up in the long run.
The X factor
MATIC's recent listing on the South Korean exchange Upbit managed to trigger the alt surge this time around. In the last 24 hours, MATIC recorded a trading volume of $ 1,870,086,050 - equivalent to 28.73% of the total volume of the exchange.
The tokens are not listed on the daily exchange. But whenever they are, they end up feeding the price of any asset. Therefore, without this event, the price of MATIC would not have been able to take such high steps in such a short time.
Eventually, accumulated withdrawal transactions [from exchanges] yesterday hit a 4-month high and the reading for this metric topped 13k. For context, an increase in withdrawal transactions implies that the accumulation trend is in play, while a fall indicates the opposite.
However, the increase was short-lived and the aforementioned level could not be sustained for long. The attached chart below clearly highlights how the transaction count witnessed a free fall. In fact, at the time of this writing, the same had returned to its 6-month lows.
Fundamentals
However, the divergence of DAA prices has been increasing lately. According to Santiment's chart, it has been projecting a strong bullish signal since the end of last month.
This model, as such, tracks the relationship between the price of the coin and the number of daily active addresses that interact with the coin. A buy signal is indicated with the DAA divergence increases along with the price. On the contrary, when active addresses decline during a price rise phase, selling pressure is induced.
MATIC being able to maintain its bullish streak on this chart, only indicates the healthy state of the active directions. Indeed, the environment is quite favorable to sustain the MATIC rally.
Note
The Upbit hype would eventually fade over time, but the fundamentals of the token and its relationship with Ethereum would continue to have a commanding impact on its price.
Therefore, if Ethereum development recovers from this point, the price of MATIC can be expected to move in tandem. The ripple effect of the same would see currency withdrawals record another rally and the build-up narrative would again gain traction.
However, if that doesn't happen, MATIC's price increase phase could end up being momentary.
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