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On-chain data reveals that while the price has been consolidating, the Polygon network development has been increasing, a divergence that may be positive for the price.
An expert on Twitter noted that a bearish divergence in the signal had previously developed and caused the price to fall by 40%. The “network growth” indicator tracks the overall number of new Polygon addresses and is provided by the on-chain data company Santiment.
In order to determine which accounts are carrying out their first-ever MATIC deals, the indicator examines blockchain data. Such names are added to the metric’s value because they are regarded as new.
When this metric’s value is high, it indicates that a lot of fresh identifiers are currently becoming active on the network. Since new addresses are typically thought to be generated by new network users, a high number for this measure may indicate that cryptocurrencies are being adopted quickly.
On the other hand, low values of the indicator suggest that there aren’t many new people presently joining the blockchain. This type of pattern may indicate that asset usage is stalling.
Here is a graph showing the development tendency of the Polygon network over the most recent few months:
The image above demonstrates how the development of the Polygon network had been generally declining earlier in the year. This indicates that the overall number of people entering the network daily was steadily declining. But as this was going on, the cryptocurrency’s price was rising quickly.
Any network’s foundations benefit greatly from a reasonable increase in user numbers, which can also be long-term positive for the asset’s worth. However, the price increase early in the year coincided with a decline in the number of new customers, so the rally may not have been long-lasting.
The asset experienced an abrupt 40% price decline after this negative divergence between the indicator and Polygon’s value developed, dropping to some comparatively low levels.
The price has been mostly fluctuating sideways since this decline. However, the MATIC network development is now characterized by a persistent upward trajectory.
This metric’s upward tendency suggests that the user population is currently expanding quickly. As was previously stated, adoption like this can benefit the network in the long run because it creates a strong foundation for long-term development.
Since the price and the indicator have lately separated once more, the commodity may once more experience some effects as a result. However, the expert believes that since the divergence is positive this time, Polygon may experience an uptick as a result.
As of this writing, Polygon is selling at about $1, down 1% from the previous week.
