Polygon (MATIC) Dropped from Grayscale GSCPxE Fund Amid Bearish Market Trend

• MATIC has been recently excluded from Grayscale’s GSCPxE Fund, marking a significant development in the cryptocurrency space.
• The decision seems to correlate with MATIC’s downhill trend over the past month.
• Grayscale Investments, the world’s largest manager of crypto assets, made this adjustment as part of their Q2 2024 portfolio rebalancing.

Grayscale pulls MATIC from its GSCPxE Fund, a move reflecting the altcoin’s rocky performance and ongoing market trends.

Grayscale Adjusts Fund Composition Post-Q2 Review

Grayscale Investments has made notable alterations to its fund components following the second quarter of 2024. Known for controlling substantial crypto assets, Grayscale includes funds like GSCPxE, OTCQB: DEFG, and OTCOX: GDLC in its portfolio. The company’s latest adjustment was broadcasted through CSIMarket, highlighting the aim to maintain diversification in response to investor demand.

Key Details on the Fund Weights

According to their recent update, the composition of the GDLC fund remained stable, holding significant allocations in BTC, ETH, SOL, XRP, and AVAX. These assets retained weights of 70.46%, 23.51%, 3.86%, 1.54%, and 0.63% respectively. Meanwhile, the GSCPxE Fund experienced more notable changes, primarily influenced by broader market conditions.

Implications of MATIC’s Removal from GSCPxE Fund

The Grayscale team adjusted their GSCPxE fund by offloading Polygon (MATIC) and reallocating the proceeds among existing assets in line with their weightings. The decision to remove MATIC was aligned with the evolving market landscape and aimed to provide greater flexibility across the fund’s components.

Impact on MATIC’s Market Performance

In the aftermath of these adjustments, MATIC’s market price saw an uptick, trading at $0.4778—an 8.5% increase within a 24-hour span. Concurrently, its market capitalization climbed to reach $4 billion. However, the trading volume experienced a significant drop of 39.74%, settling at $292 million over the same period.

Analyses indicate that MATIC is experiencing a marked bearish trend, underscored by elevated liquidation levels for long positions. Data from Coinglass revealed consecutive high liquidation figures over the past week, with heights reaching $870k, $1.6M, and $1.5M.

Market Sentiment and Future Outlook

With the Directional Movement Index (DMI) showing the negative index at 42 outpacing the positive index at 7.6, it’s clear that selling pressures are prevailing. Additionally, the DAA Divergence indicator noted a significant -40.99, suggesting a disconnect between price movement and activity levels. Unless user engagement rises, the current price trend might continue.

Conclusion

Overall, MATIC faces a challenging market environment. For the asset to escape its current bearish trend, it must break through its 200 MA. Should the downtrend persist, prices might fall to $0.42. Conversely, maintaining gains could stimulate a trend reversal, pushing the price towards the $0.5 resistance level.