Altcoin Sherpa, a voice in the crypto community, has recently shared insights on the performance of the leading cryptocurrency Polygon (MATIC) in a post on the X platform. Noting a decline in the price by 6% in the initial week of August, Sherpa suggests that the coin might underperform other chains in the midterm, raising the prominence of alternative narratives like ZK/ARB-type chains.
$MATIC: Havent checked this chart in a while, I think that this probably underperforms other chains to be honest in the midterm. Other narratives like ZK/ARB type of chains are prob better bets. #MATIC pic.twitter.com/u4l07IMlIk
— Altcoin Sherpa (@AltcoinSherpa) August 9, 2023
The fluctuation in MATIC’s price is exemplified by its decline from $0.70 to $0.66 in early August, followed by a modest recovery towards $0.68 as bulls managed to hold the $0.65 support level. This price turbulence has triggered discussions on the factors contributing to Polygon’s recent stagnation. However, the MATIC/USD cryptocurrency pair is recently trading at $0.6924, while it’s trading volume hovers around $264,164,129, a 13.98% fall in the past 24 hours.
One key element affecting MATIC’s price is the dwindling user activity on the Polygon network. Over the last three weeks, Polygon’s daily active users have witnessed a downward trend, as highlighted by Glassnode data. For instance, while the network recorded 4,575 active users on July 21, this number plummeted to 1,943 by August 7, indicating a substantial 58% reduction in user engagement.
On the technical front, technical indicators such as the Moving Average Convergence Divergence (MACD) and Relative Strength Index (RSI) both support a potential recovery rally. The MACD and signal lines are on the brink of a bullish crossover with diminishing bearish histograms. Additionally, the RSI exhibits a sharp upswing, reflecting an underlying bullish sentiment and hinting at a reversal.
Market analysts foresee the breakout rally being propelled by the accumulated momentum from the falling wedge pattern, potentially leading to a break of the previous swing high. However, a cautionary note is sounded; an early reversal that pushes MATIC prices below $0.65 could result in a 7.39% drop, testing the $0.60 mark.
Meanwhile, Binance’s decision to delist its perpetual contracts for Cardano (ADA) and Polygon (MATIC) allegedly significantly affects Polygon. As part of its plan, Binance would adjust leverage and margin tiers for ADABUSD and MATICBUSD perpetual contracts before the automatic settlement scheduled for August 17. This move raises questions about the potential impact on the coin’s value and market dynamics.
