Polygon (MATIC), the blockchain scalability platform, is currently facing a negative sentiment that is overshadowing its prospects for a strong price recovery. The cryptocurrency market has always been volatile, prone to sudden shifts in sentiment, and MATIC is no exception.
The recent decline in sentiment surrounding MATIC has made investors and traders cautious about watching the price charts.
The growth potential of Polygon, once considered a promising project in the crypto space, has been affected by the recent actions of the US Securities and Exchange Commission (SEC) against altcoins.
Will the negative sentiment continue to hinder MATIC’s potential for a strong price recovery?
Polygon Whales Unfazed by US Regulatory Pressure?
Current data on MATIC shows that the pressure from US regulatory authorities has apparently not completely unsettled some prominent investors, as evidenced by a significant increase in whale transactions exceeding $1 million in recent days.
However, at the time of writing this article, the cryptocurrency was not able to maintain strong upward momentum despite the increasing appetite of whales.
CoinMarketCap reports the current price of MATIC at $0.5818, representing a 2.33% decline in the last 24 hours. Additionally, the cryptocurrency has experienced a significant drop of 25.93% in the past seven days.
In addition to the impact of regulatory pressure, movements in MATIC’s supply on exchanges, which serve as an indicator of short-term selling pressure, have shown rapid fluctuations during the same period.
These developments indicate that selling pressure on MATIC continues to be a significant issue, especially due to prevailing regulatory uncertainty.
The Fed’s Pause on Interest Rate Hikes Can’t Stabilize Crypto Markets
Overall, financial markets continue to show volatile movements, leading cryptocurrencies to detach from the development of traditional stock markets.
The recent downturn in the crypto market seems to be related to the press conference of US Federal Reserve Chairman Jerome Powell on June 14, where he announced that the central bank would temporarily halt interest rate hikes for the month of June.
Although this decision met investor expectations, it had unexpected effects on the crypto market. Instead of stabilizing, there was a market reversal and renewed sell-off that has been ongoing for the past three weeks.
The presence of significant macroeconomic challenges combined with expectations of future interest rate hikes and low trading volumes suggests that volatility in the cryptocurrency market is likely to persist in the foreseeable future.
The prevailing headwinds, including larger-scale economic factors, have contributed to unpredictability and turbulence in the crypto market.
Selected image from Analytics Insight.
