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<ul>
 <li>MATIC, a key Layer 2 scaling solution for Ethereum, has surged 57% in the past month to $1.12.</li>
 <li>Polygon’s rally faces pressure as on-chain data shows a surge in tokens available for sale, indicating profit-taking.</li>
 <li>MATIC’s price outlook hinges on Bitcoin’s performance; continued BTC strength could propel MATIC above $1.18</li>
</ul>
<a href="https://thenewscrypto.com/?s=Polygon" target="_blank" rel="noopener noreferrer nofollow">Polygon</a> (MATIC), one of the most prominent Layer 2 scaling solutions for Ethereum, has been on an absolute tear over the past month. Riding the coattails of Bitcoin’s resurgence, MATIC has posted a 57% gain in just 30 days to reach its current valuation of $1.12.
However, this upward march now faces its biggest test as MATIC investors appear primed to take profits off the table. According to on-chain analytics provider Glassnode, the supply of MATIC tokens available on exchanges has swollen by 100 million over the last 12 days to 1.2 billion.
<figure class="wp-block-image size-large"><img decoding="async" width="1024" height="576" src="https://thenewscrypto.com/wp-content/uploads/2024/03/image-22-1024x576.png" alt="" class="wp-image-93037" srcset="https://thenewscrypto.com/wp-content/uploads/2024/03/image-22-1024x576.png 1024w, https://thenewscrypto.com/wp-content/uploads/2024/03/image-22-300x169.png 300w, https://thenewscrypto.com/wp-content/uploads/2024/03/image-22-768x432.png 768w, https://thenewscrypto.com/wp-content/uploads/2024/03/image-22-376x212.png 376w, https://thenewscrypto.com/wp-content/uploads/2024/03/image-22.png 1536w" sizes="(max-width: 1024px) 100vw, 1024px">
</figure>
Rising exchange reserves typically signal traders intent to sell and realize gains from rallying prices. This intent gets particularly pronounced amidst short-term speculative manias when holders rush to cash out ahead of corrections.
Worryingly, MATIC’s supply distribution data reveals that short-term speculators – defined as addresses holding less than one month – now account for 7.8% of circulating supply compared to just 3.9% two weeks ago. These traders currently hold $782 million worth of MATIC, which could rapidly hit the market.
<h2 class="wp-block-heading" id="h-matic-price-outlook-tied-to-bitcoin-s-trajectory">MATIC Price Outlook Tied to Bitcoin’s Trajectory</h2>
With investors seemingly hitting the sell button just as MATIC nears the critical $1.18 resistance barrier, Polygon’s price outlook depends largely on whether Bitcoin can continue pulling the market higher. These two assets share a strongly positive 0.9 correlation, so MATIC often shadows BTC’s moves.
Following Bitcoin’s breakout to an all-time high of $69,000, residual momentum could lift MATIC above $1.18 and target the $1.20+ range. However, any BTC pullbacks may leave Polygon struggling for support and force MATIC to fallback below the $1.05 mark to invalidate its bullish setup.
<figure class="wp-block-image size-large"><img decoding="async" width="1024" height="471" src="https://thenewscrypto.com/wp-content/uploads/2024/03/image-23-1024x471.png" alt="" class="wp-image-93038" srcset="https://thenewscrypto.com/wp-content/uploads/2024/03/image-23-1024x471.png 1024w, https://thenewscrypto.com/wp-content/uploads/2024/03/image-23-300x138.png 300w, https://thenewscrypto.com/wp-content/uploads/2024/03/image-23-768x354.png 768w, https://thenewscrypto.com/wp-content/uploads/2024/03/image-23.png 1536w" sizes="(max-width: 1024px) 100vw, 1024px">
</figure>
So while MATIC faces plenty of internal risks from holders distributing, external factors like Bitcoin’s prevailing strength may ultimately decide if this altcoin rally has the legs to reach new heights or the rug pulled beneath it from profit-seekers.

Polygon Investors Switch to Selling Mode – How Will This Affect MATIC?

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TheNewsCrypto

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