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08/21/2022

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Reasons Why Polygon Is Trading Up 100% In A Bear Market

Reasons Why Polygon Is Trading Up 100% In A Bear MarketATZCrypto - Latest Bitcoin, Ethereum, Crypto News & Price Analysis Polygon (MATIC) is among the projects that have continued to show signs of mainstream adoption despite the recent crypto...

Reasons Why Polygon Is Trading Up 100% In A Bear Market

Bear markets differ from conventional bull markets, where traders can easily guess which coin will go up. Investors must put in much more effort in bear markets to identify projects that could do well over the long run.

Polygon (MATIC) is among the projects that have continued to show signs of mainstream adoption. The mass adoption comes even in the face of the crypto winter. Polygon is a layer-two scaling solution for the Ethereum (ETH) network looking to build a sustainable Web3 infrastructure on the top smart contract platform.

MATIC Price Analysis

On August 18, MATIC retested the $1 psychological level but failed to reclaim it. Consequently, the short-term traders started to take profits, and the Polygon crypto price ran south. There have been common corrections across the cryptocurrency market. This is happening following the sudden pullback in Bitcoin price. The rejection of BTC from the $25k level has shaken investor confidence as the bottom buyers are locking heavy profits.

MATIC/USD Daily Chart

Reasons Why Polygon Is Trading Up 100% In A Bear Market

At the time of writing, the Polygon MATIC price is trading at $0.78 on CoinGecko, down by 12.4% over the last 24 hours. DeFI Llama says the Polygon TVL has increased by $500 million within a week. Currently, the platform TVL is $2.09 billion.

From the technical analysis of MATIC USD price chart, it is clear that the bulls may be losing some of their steam. This is because the price has tried to break beyond the $1 level thrice with no instance of success. Because of this, the price of MATIC has now broken lower than the rising wedge pattern on the chart.

With breakdowns of this kind, the market is normally very bearish for long periods. Nonetheless, the bulls may turn ugly should the MATIC price gain acceptance under the trendline. In such a situation, however, the short-term Polygon MATIC price prediction will show bearish signs, putting a retest around the $0.61 level.

Another important element that affects MATIC price is the price action of Bitcoin. This is because of the high level of correlation between MATIC and BTC. As such, should the current recovery pattern displayed by BTC be sustained, other altcoins like MATIC are also likely to recover and take the form of a positive pattern. In the same way, another BTC nose dive may provoke a massive sell-off within the market.

Reports about Polygon MATIC news dated August 18 show that the project signed a gaming partnership with Catheon Gaming. With this association, the two parties would commit to bringing quality entertainment, while developing gaming to the blockchain. To do this, they would have to elevate the user experience.

Reasons Why Polygon Is Trading Up 100% In A Bear Market

There are many reasons why MATIC continues to uphold a positive outlook. The best three, however, include:

  1. Continued Adoption By Mainstream Organizations

The first reason why MATIC is showing positive trade entails continued adoption by famous leading organizations. Experts believe this is one of the best forms of advertising that a blockchain platform can receive. This is because it exposes them to a large pool of potential users.

Over the past few months, Polygon has formed associations with multiple influential entities, including but not limited to Coca-Cola, which launched a pride series NFT collection on the network. There is also Reddit, which announced that it was launching an NFT marketplace on the Polygon network on July 7.

The latest information about MATIC adoption was presented in an announcement communicating Disney’s selection of the Polygon network. Per the announcement, Disney chose Polygon as the only blockchain featured in the 2022 Disney Accelerator program.

The announcement read, “this business development program is structured to accelerate the growth of innovative companies from around the world.”

  1. Many projects are Migrating to the Polygon network

Another reason to explain Polygon’s continued success is the number of protocols that are launching atop the Polygon network. According to data, Polygon now stands among the favorite go-to places for Ethereum projects that are looking to scale their solutions. There continues to be steady migration as well as integration of projects with the Layer 2 network.

Citing a Twitter post, “48 Projects are landing on @0xPolygon with OnePlanet.” This is part of the network’s commitment to moving together with community members towards the rebuilding and growing of the NFT ecosystem.

Other than the recent non-fungible tokens (NFT) related projects that have since joined the Polygon network, there have also been other integrations. One on the list is the permissionless credit protocol RociFi, and WOO network’s multi-chain decentralized exchange.

RociFi protocol introduced the pioneering permissionless under-collateralized credit protocol on Polygon in the entire DeFi ecosystem. The protocol adds permissionless under-collateralized loans to Polygon’s fast-paced, secure, and active ecosystem. The RociFi protocol focuses on more objectives that are important. The ultimate goal is to develop every key protocol metric running on the Polygon ecosystem.

Polygon has a first mover advantage when it comes to the Ethereum-scaling space. This is because of its Matic network. The network made it possible for users to make use of trusted dApps like Aave and Opensea while paying only a fraction of the cost. They also enjoy the remarkable speed characteristic of Layer-one Ethereum.

Motivated by the same concept, WOOFi also went live with its early prototypes. The network decided to be using more proactive marketing making (PMM) pools on Polygon. In so doing, the project linked to DeFi aggregators like 1inch and DODO. Beyond that, the pools were successful, an outcome that facilitated the WOO Network in launching several other prototypes. The prototypes include high-performance pricing oracles with Chainlink on the Polygon network.

  1. Growing number of platforms that offer liquid staking services for MATIC.

MATIC has also seen a growing number of platforms offering liquid staking for the MATIC token. Owing to the fact that Polygon staking happens on the Ethereum network, it causes ETH gas fees every time stakes are delegated.

Other than the cost of gas fee, the process entails choosing a validator node that can be trusted. The list of available nodes keeps changing. It also involves selecting the capital inadequacies because the staked MATIC’s value will be locked and not present for interacting with decentralized apps on DeFi. Noteworthy, the period of unbonding varies but would normally last between one and two days. This is equal to almost 80 checkpoints.

Liquid staking makes it possible for holders to earn staking rewards. With this feature, they can use the staked crypto assets for purposes of identifying other opportunities such as trading or investing opportunities and enjoy gains from both lines. In so doing, the reward generated will come from the assets that were staked. In the same way, the returns will be generated from newly identified trading and investment opportunities.

Liquid staking achieves this through the tokenizing of stakes and shareholders can use them as security in different financial applications.

Users can freely trade in tokenized stakes, otherwise referred to as staking derivatives, across different locations and blockchains (interoperability). This explains why liquid staking has become more popular with time over the past few days. Now, multiple different projects have adopted this feature and running on DeFi ecosystem. In the same way, crypto holders are investing in these projects with the goal of monetizing their stakes.

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