Why MATIC needs Ethereum to pump now more than ever

A multitude of coins followed in Bitcoin’s footsteps and rallied around it yesterday. However, when the king-coin’s price took a break and started “chilling” around $62k, most of the alts stepped back.

Nevertheless, MATIC remained the only alt [apart from NU] of the top 100 which continued to reflect double-digit 24-hour appreciation numbers even at the time of writing.

After witnessing its own share of consolidation over the last few months, MATIC finally flipped its “consolidation” narrative yesterday by registering 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 7th.

The Ethereum-MATIC bond

MATIC has followed Ethereum’s footsteps during most uptrend/downtrend phases. Consider this – In May, as Ethereum created new highs daily, MATIC rose 350% [from $0.6 to over $2.7] in just two weeks. Notably, during that same period, Bitcoin was trending lower on its price chart.

Ethereum did manage to note an increase of less than 1% in the past day, however. So, one may argue that the relationship that MATIC shares with ETH is gradually fading away.

While the aforementioned argument may seem true for now, it’s worth noting that it wouldn’t hold up in the long run.

The X factor

The recent listing of MATIC on South Korean exchange Upbit managed to trigger the alt’s surge this time. In the last 24 hours alone, MATIC has recorded a trading volume of $ 1,870,086,050, or 28.73% of the total exchange volume.

Tokens aren’t listed on exchanged on a daily basis. But whenever they are, they end up nurturing any asset’s price. Thus, without this event, the price of MATIC could not have made such high progress in such a short period of time.

Eventually, the cumulative withdrawal transactions [from exchanges] recorded a 4-month high yesterday and the reading of this metric surpassed 13k. For context, a spike in withdrawal trades implies that the accumulation trend is in play, while a decline indicates the opposite.

The surge was, nevertheless, short-lived and the aforementioned level couldn’t sustain for long. The chart below clearly shows how the number of trades has plummeted. In fact, at the time of writing, the same was back to its 6-month low levels.


However, the DAA price divergence has increased lately. As per 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 interacting with the coin. A buy signal is indicated with the DAA divergence increases alongside the price. Conversely, when active addresses fall during a phase of rising prices, selling pressure is induced.

MATIC being able to maintain its bullish streak on this chart, only indicates the healthy state of the active addresses. Indeed, the environment is favorable enough to support the rally of MATIC.


The Upbit hype would eventually fade away with time, but the token’s fundamentals and its relationship with Ethereum would continue having an imposing impact on its price.

So, if Ethereum picks up from this point, we can expect the price of MATIC to move in parallel. The ripple effects of the same would cause the exchange withdrawals to register another uptick and the accumulation narrative would re-gain steam.

However, if this does not happen, the MATIC price rise phase could end up being momentary.


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