Polygon’s price has dropped 5% in the past week ahead of Ethereum’s Shapella upgrade. While the Polygon developers have been launching products to complement Ethereum rather than compete, concerns over the long-term viability of the Layer 2 (L2) network have grown since Ethereum’s move towards Proof-of-Stake. Polygon has been working on auxiliary cross-chain infrastructure for Ethereum 2.0, with Vitalik Buterin offering his support. However, MATIC whales appear to be taking a cautious approach as the Shapella upgrade approaches, with large transactions involving MATIC dropping by 50% in the past week. Meanwhile, on-chain data reveals that DeFi investors also appear to be taking bearish positions on MATIC, with tokens locked in smart contracts reducing considerably in recent weeks.
The teeming number of Polygon investors that would break even at the $0.90 zone could end the current bearish spiral. However, MATIC is likely to lose its current support at $0.95, although over 42,000 addresses holding 454 million coins are looking to prevent the drop at this price. If MATIC can break the $1.15 resistance, it could rally towards $1.31, but there may be a pullback caused by another break-even cluster holding 430 million coins. As always, it is essential to conduct one’s own research and consult a professional before making any financial decisions.