What MATICs Exclusion from Grayscale Fund Means for Its Price

CryptoSlate reports that MATIC has been removed from Grayscale’s GSCPxE fund. The decision may stem from the altcoin’s month-long downtrend on the charts.
Grayscale Investments has announced adjustments to the composition of its funds post Q2 2024. Grayscale Investments, the world’s largest crypto asset management company, controls various components including GSCPxE, OTCOX:GDLC, and OTCQB:DEFG. Following the Q2 review, they updated the fund weightings for each product. This development was announced through a statement on CSIMarket’s official page, stating,
“Grayscale Investments rebalances crypto funds to meet investor diversification needs: $GBTC GrayscaleInvestments announces Q2 2024 rebalance of crypto funds.”
As per the updates, the GDLC token remains unchanged, with weights for assets such as BTC, ETH, SOL, XRP, and AVAX at 70.46%, 23.51%, 3.86%, 1.54%, and 0.63% respectively.
MATIC Removed from Grayscale GSCPxE
However, adjustments were made to the GSCPxE based on the Coindesk Smart Contract platform Select ex ETH index. These adjustments involved selling Polygon (MATIC) and utilizing the proceeds to purchase existing fund components in line with their weights.
Consequently, MATIC has been removed from the GSCPxE fund. These adjustments were made to align with current market trends while ensuring flexibility for each asset based on its weight.
Impact on MATIC Price
As of the time of writing, MATIC has seen an 8.5% increase in trading price to $0.4778 after 24 hours. Concurrently, its market capitalization has risen to $4 billion on the charts.
Conversely, trading volume has decreased by 39.74% to $292 million over the past 24 hours. This decline comes amidst weekly price drops in altcoins.
Similarly, analysis from AMBCrypto indicates that MATIC has been on the receiving end of a strong bearish trend.
An analysis by Coinglass suggests that MATIC has surpassed high liquidation levels. Especially over the last six days, there have been higher liquidations in long positions, with figures reaching $870,000, $1.6 million, and $1.5 million consecutively.
The high liquidation rate in long positions implies a downward price movement contrary to investors’ expectations, forcing them to close their positions.
Lastly, in terms of Directional Movement Index, the negative index (42) surpasses the positive index (7.6). When DMI is set up this way, it signifies a bearish signal. Simply put, on the charts, selling pressure seems to outweigh demand.
Additionally, a DAA divergence at -40.99 suggests a potential opposite movement to activity levels. This might indicate waning market interest, making the price direction unsustainable unless user activity picks up.
Can MATIC Recover?
As of writing, MATIC appears to be in a bearish trend until breaking through the 200 MA. Should this trend continue, the price could drop to $0.42.
However, should the gains on the daily chart hold, a trend reversal could occur, pushing the market up to the next resistance level around $0.5.