- According to Ali Martinez, MATIC’s key metric presents a buying opportunity.
- There are still bearish sentiments in the token market.
The market value to realized value (MVRV) ratio of Polygon’s native token MATIC has given a buy signal, crypto analyst Ali Martinez noted in a message on X (formerly Twitter).
According to the analyst, the token’s MVRV ratio, assessed against various moving averages, returned negative values. Per Santiments data, MATIC’s MVRV ratios on 30-day and 365-day moving averages were -10.11% and 11.99%, respectively, at the time of writing.
The MVRV ratio tracks the ratio between the current market price of an asset and the average price of each coin or token purchased for that asset.
A positive MVRV ratio above one indicates that an asset is overvalued. It suggests that the current market value of an asset is significantly higher than the price at which most investors acquired their holdings.
Conversely, a negative MVRV value indicates that the asset in question is undervalued. It suggests that the market value of the asset in question is lower than the average purchase price of all tokens in circulation.
As Martinez noted, MATIC’s negative MVRV ratios present a “perfect time to buy.” This is because MATIC is trading at a discount to its historical cost base at its current price.
Are MATIC bulls making a comeback?
A review of MATIC’s price movements on a 1-day chart showed a slow shift in market sentiment from bearish to bullish.
First, the readings of the token’s parabolic SAR indicator showed that the points were below the price at the time of writing. This indicator is used to identify potential trend directions and reversals.
When the dotted lines are placed below the price of an asset, the market is said to be in an uptrend. It indicates that the price of the asset is rising and may continue to rise.
Similarly, MATIC’s MACD line (blue) is now above the signal line (orange) for the first time since March 15. When these lines are positioned in this way, the shorter-term average of an asset is above the longer-term average.
It is a bullish sign, and market participants take it as a sign to enter long positions and exit short positions.
Read Polygon [MATIC] Price forecast 2024-2025
However, while buying activity may have returned to the MATIC market, bearish sentiments remain significant. For example, the negative directional index (red) is still above the positive index (green).
This suggests that the strength of MATIC bears is significantly greater than that of its bulls as selling momentum remains high.
Source: MATIC/USDT on TradingView