In 2022, the original token value of Polygon MATIC will decrease 64%. But the network started this year on a positive note, with prices increasing by 8% according to the chart. However, can MATIC maintain this momentum?
On-Chain Development Has A Big Role For MATIC
The Layer 2 ecosystem has experienced on-chain development. Before the turn of the new year, Polygon’s first prediction market Bhavish Finance made some notes that brought Polygon in the spotlight. Uniswapdecentralized exchange in the ecosystem, finished 2022 with an annual volume of $28 billion.
DEX surprisingly with a sub-$100 million TVL, but at the time of writing Uniswap’s TVL at Polygon is at $111.21 million, according to the DEX public dashboard.
Chart: Uniswap.org
This bullish development, however, was preceded by big news in Polygon’s NFT arm. DeGods and y00tstwo of the biggest names in Solana, will bridge collection on Polygon and Ethereum in Q1 2023.
This will certainly bring interest in the NFT Polygon market, pushing up the price of MATIC. However, with the timeline close from Upgrade the ‘Shanghai’ network of Ethereum, Polygon’s main offer, which costs less gas due to a better roll-up protocol, will be a challenge.
With this in mind, it remains to be seen what the chain will do distinguish Polygon with Ethereum upgrades and other L2 protocols.
Crypto FUD Will Strengthen Long-Term Bears
The crypto market has definitely suffered from the past year great collapse. But the FUD (fear, uncertainty and doubt) that is happening about the event may be reinforced because Huobi, the centralized exchange, seems to be disappearing in real time.
Recent news indicates that CEX will laying off 20% of their employees. A tweet about Huobi’s situation shows that Justin Sun, the shadow owner of Huobi is called convert billion crypto to fiat on Binance.
MATIC total market cap at $7 billion on the daily chart | Chart: TradingView.com
The exchange itself is also observed to have increased withdrawals in the past few days. This has led to some speculation that the exchange could be the next FTX. Any negative development here will affect Polygon as the insolvency news affects the crypto market in particular.
🟡 What could happen to Huobi?
– Huobi had outflows of $80m(4%) in the past 24H, and $133m(7%) in 7D VS net assets of $2B
– Can stop withdrawals and activities if conditions are not suitable
– The thing to do now is cancel it and keep it to yourself— Rock 🪨 (@DataaRocks) January 6, 2023
Short- to mid-term however, MATIC has some room to grow as the current support at $0.7538 proves to be a barrier for bears.
Previous on-chain bullish developments also helped investor sentiment remain positive. But with the token’s strong correlation with ETH, negative macro can pull the king of altcoins down together with MATIC.
Investors and traders should target the $0.8106 price resistance to continue the MATIC bullishness.
-Featured image: The Daily Hodl