Polygon is one of the fastest growing networks in the last three yearsConsidering that it has been specially created to provide an alternative that will solve Ethereum’s layer 2 problems, at the brand and network level it has gone from being a simple sidechain to a competitive network in the mainstream of the blockchain sector.
Likewise, both the developers and Matter Labs, in charge of managing Polygon, have given themselves the task of creating an optimistic and bullish narrative around the network, taking Notable sectors such as NFTs, being far from its record peak of daily transactions within the network, and a DeFi ecosystem in full bearish stage.
Source: Polygonscan chart TX
Source: DeFiLLama
Fundamentals in Polygon
Some highlights of Polygon in recent months and that give a remarkably positive outlook for the project are three: First, by the end of March, according to Polygon Labs, an improvement in scalability and the release of the version will be released. beta of its zero-knowledge Ethereum Virtual Machine mainnet, which, in the context of scaling, will allow platforms to validate massive amounts of transaction data before bundling and confirming it on Ethereum with a reduction in transaction cost to about 0.06 USD and less than 0.001 USD.
Also the fact that Meta chose Polygon as an initial partner for the development of NFTs features on Instagram, and finally the commitment of the network in the development of the web3 by incorporating Ryan Watt, former head of YouTube games, to run Polygon Studios in a sector where the network already has the development of more than 60 metaverse projects.
MATIC Market Sentiment
That being said, prior to moving on to technical analysis, it is also important to note current market sentiment for MATIC, which according to cfgi.io’s fear and greed index is at 35% fear level, according to the explanation of this index. In other words, it can be interpreted that investors in MATIC have reacted negatively to the latest BTC movements that have generated selling pressure throughout the market after reaching profit zones in altcoins after the last bull run.
Source: cfgi.io
Matic Technical Analysis
For purposes of technical analysis, in the monthly chart From the MATIC price we can observe the development of a setback that has brought the price below the 20-month moving average (MA 20), and that if it continues like this for the next few weeks, the price despite being in an important decision zone at the level of 1.00 USD, It could reach levels of 0.92-0.94 USD if the bearish pressure increases, or reach the bottom of a possible bullish channel that is forming at this time.
Source: Tradingview MATIC 1M
By observing the weekly chartyou can clearly see the magnet functionality at the price that the 20-week MA is exercising, a well-respected moving average in the price action of the cryptocurrency in previous cycles, if so, only considering the technical analysis could indicate the continuity of a bullish move formed in the designated channel. However, it is clear that there are other factors that influence the market.
Source: Tradingview MATIC 1W
On this occasion, at the time of writing this note, the MA 20 weeks is marked on USD 1.0091, currently considered by investors to be an important area to seek liquidity, being a clear example the registration of Binance orders where there is a significant amount of MATIC to buy:
Source: Buy Order Book on Binance
It is certain that the price will reach that moving average, but the possibility of even descending one area below the 50 MA (0.933 USD) is not yet ruled out, since despite showing a strong 20 MA on other occasions, the Price did not matter and reached lower levels where the 50-week average was.
With respect to daily chartfirst of all a bullish formation of the moving averages is observed (20,50,100,200) Despite signaling a clear retracement, I am not respecting the 20 and 50 day moving averages respectively. The 100-day moving average is now being searched for in this timeframe.
Source: Tradingview MATIC 1D
On the other hand, it can also be detailed in a more comprehensive way that, since May of last year, the bullish channel that we have previously indicated began to be drawn on the graph with higher lows and which translates into a previous vision with a sign very positive for long-term price action. It will depend on the market, but the MATIC price, according to what has been seen in this temporality and what has been previously explained, has two options within that bullish channel, and they are: continue to move along with the noise of the moving averages in the area above $0.90, or go lower than that area looking for the bottom of the channel (approximately $0.86) which would therefore be a higher low in the uptrend of the channel and would equally represent its continuity.
Will MATIC reach 5 USD?
As we well know, the answer to these questions is merely speculative since there are many variables to consider to determine the possibility that a cryptocurrency or token will reach a certain price in a certain period of time; however, when calculating an increase that estimates that price and taking into account the current amount of MATIC issued, only a 365% increase in its current price would be required, which would imply an increase of 4.77 times the current market capitalizationthat is, a little more than double its historical record (20.59 billion) reached on December 26, 2021 according to Coinmarketcap data. Not impossible, but difficult given the current economic situation, the neutral behavior of Bitcoin, and the price zones registered as important when the cryptocurrency reached its all-time high (2.92 USD).
Source: The Coinperspective
On the other hand, it is worth mentioning that if the total supply of MATIC (10 billion) is considered, it would even be even more difficult to reach 5 USD, lowering the current reality, since it would imply reaching a market capitalization of 50 billion dollars.
Source: The Coinperspective
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