MATIC is currently facing more uncertainty as it is officially classified as a security by the US Securities and Exchange Commission, as disclosed in the recent filing against Binance.
Consequently, the Polygon blockchain token experienced a significant drop of 31% within a week, setting a new record. However, there is also positive news as it has managed to recover, with a promising recovery of more than 11% in the last 24 hours.
Source: Coingecko
L2 coins will be the next bull run coins. Already known, already confirmed.$SOL $ADA $MATIC and others L1 have the security stamp. Regulations will kick hard = tight choice of L1/L2 coins. Where does all that money go? pic.twitter.com/jw5xpLRA4j
— Zoomer Oracle (@ZoomerOracle) June 5, 2023
MATIC is one of 13 tokens within the Binance lawsuit to be classified as a security. Polygon Labs, the developer of MATIC, issued a statement on Twitter defending Polygon, saying that the network was “developed outside of the US, deployed outside of the US, and to this day is aimed at the global community that uses it.” network supports.”
This recent lawsuit against Binance was followed by the SEC’s lawsuit against Coinbase, citing that the company operates an unregistered exchange in connection with the company’s staking service.
Fear, uncertainty and doubt in the market
With the recent classification of several cryptocurrencies as securities, the market has fallen significantly over the past week. Bitcoin, the main cryptocurrency, won dominance in light of the recent regulatory fills against Binance and Coinbase.
The other tokens in the list are SOL, ADA, FIL, ATOM, SAND, MANA, ALGO, and COTI. According to the lawsuit, the tokens are listed as investment contracts. Because of this, the SEC designated them as securities in accordance with the Howey testwhich is a test to know whether a particular asset is a security or not.
MATIC market cap at $5.8 billion. Chart: TradingView.com
This move by the SEC was in line with its recent actions against the crypto industry. In February alone, the regulatory body cracked down on Kraken’s strike service, forcing the company to pay $30 million in fines for the violations.
If the said tokens and companies fail to comply with the SEC, it could lead to another Ripple-like event that will affect the market.
MATIC Bulls should watch this level
At the time of writing, MATIC is supported at the $0.6 price level, which will serve as a starting point for future bullishness. However, external market forces still prevail in the token’s momentum and price action in the near future. The recent lawsuits have already scrapped millions and millions of potential profits for investors.
Source: Coinglass
In the meantime, CoinGlass data shows that MATIC long positions were liquidated as the market crashed after the lawsuits were made public.
Despite this, buying pressure continued after the crash with MATIC bulls holding $0.6 support. If they can hold this level of support, we may see a return to the $0.83 support in the medium to long term.
Featured image from The Daily Hodl
