Polygon (MATIC) Weak Despite Uptick in Adoption: China Ban Effect?
Polygon (MATIC) is trading slightly cautious early on Thursday, sliding lower after a brief climb even as interesting fundamental developments offset the reigning uncertainties the entire crypto market faces in the aftermath of China’s latest ban. At the time of writing, MATIC/USD is trading at around $1.10.
One of the main reasons triggering the bullish sentiment in the market towards the popular Layer-2 scaling solution for Ethereum is data indicating that the blockchain surpassed the Layer-1 Ethereum network in terms of daily active addresses for the first time earlier this week. This shows the rising interest in using its ecosystem, especially among leading dApps such as Aave, Curve finance and SushiSwap.
Ethereum’s very own internet of blockchains as it is known supports over 300 dApps on its ecosystem with a TVL of more than $9 billion. The network has witnessed a sharp increase in the number of new addresses over the past one month, adding over 2.5 million new addresses on 23 September alone. High gas fees and network congestion issues on the Ethereum network has increased the demand for L2 scaling solutions like Polygon, supporting the increase in its on-chain activity and uptick in its token’s value.
Polygon’s price has surged by over 5,500% over the past one year and could enjoy further support from fundamental developments. One of the most notables among recent developments is the Polygon Network offering $1 million worth of grant to the QuickSwap DEX in order to boost its adoption among users. Similar to the case with Aave earlier this year, the grant could help boost the TVL of QuickSwap, providing higher levels of liquidity for dual-farming of certain crypto pairs and increasing its use among users.
In addition, WISeKey International Holding Ltd – a leading cybersecurity, IoT and AI platform company has opted to use Polygon’s ecosystem to launch its Trusted NFTs solution. These high-value NFTs will test the appetite of the art and collectible community online, with WISe.Art’s platform allowing tokenization of digital and physical assets in the form of NFTs.
Key Levels to Watch
On the 4-hour chart of MATIC/USD, most of the larger moving averages along with the momentum indicator present a bearish bias. However, the smaller timeframe MAs in addition to the MACD suggest some buying interest in the crypto pair as well.
Polygon’s price is looking weak under the pivot point at $1.15 although it manages to hold above the immediate support at $0.98. We need to keep a close eye on this level as an increase in selling pressure can take MATIC under the key $1 mark towards testing this support.
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