The year 2022 saw the value of Polygon’s native MATIC token drop 64%. But the network started this year on a positive note, with the price soaring 8% according to the charts. However, can MATIC maintain this momentum?
Chain developments will play an important role for MATIC
The Layer 2 ecosystem has seen on-chain developments grow. Just before the turn of the year, the first Polygon prediction market Bhavish Finance done multiple records that put Polygon in the spotlight. uniswapa decentralized exchange in the ecosystem, term 2022 with an annual volume of $28 billion.
The DEX surprisingly achieved that with a TVL of less than $100 million, but at the time of writing, Uniswap’s TVL on Polygon is at $111.21 million, according to the public DEX dashboard.
These bullish developments, however, are preceded by big news about Polygon’s NFT arm. gods Y y00tstwo of the great names of Solana, will build a bridge its collections on Polygon and Ethereum in the first quarter of 2023.
This would inevitably generate interest in the Polygon NFT market, driving up the price of MATIC. However, with the proximity of the timeline of the ‘Shanghai’ Network Update of Ethereum, Polygon’s main offering, which is low gas fees due to a better accumulation protocol, will be challenged.
With this in mind, it remains to be seen what developments in the chain differentiate Polygon with the update of Ethereum and other L2 protocols.
Crypto FUD Will Strengthen Long-Term Bears
The crypto market has definitely suffered from the effects of the past year. large landslides. But the FUD (Fear, Uncertainty, and Doubt) that has arisen from these events could strengthen as Huobi, a centralized exchange, appears to be melting down in real time.
Recent news shows that the CEX will be the dismissal of 20% of its employees. Tweets about the Huobi situation show that Justin Sun, the alleged shadow owner of Huobi, has been moved out billions of your crypto for fiat on Binance.
MATIC’s total market capitalization at $7 billion on the daily chart | Chart: TradingView.com
It is also noted that the exchange itself has higher withdrawals in the last days. This led to some speculation that the exchange could be the next FTX. Any negative development here would hit Polygon as the insolvency news hit the crypto markets particularly hard.
🟡 What could happen to Huobi?
– Huobi has an output of $80 million (4%) in the last 24 hours and $133 million (7%) in 7D VS its clean assets of $2 billion
– Could stop withdrawals and activities if the situation gets out of proportion
– The risk averse thing to do right now is withdraw and self-guard.
— Rock 🪨 (@DataaRocks) January 6, 2023
In the short to medium term, however, MATIC has some room to grow as the current support at $0.7538 proves to be a barrier for the bears.
Previous bullish developments on the chain also help investor sentiment to remain positive. But with the token’s strong correlation to ETH, negative macros could topple the king of altcoins together with MATIC.
Investors and traders should target price resistance at $0.8106 to continue the MATIC uptrend.
-Featured image: The Daily Hodl
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