Ethereum (ETH) oriented scalability protocol Polygon (MATIC), reached on December 27. $2.92 has been declining ever since. MATIC, since then 40%′lost more than . Despite this, MATIC is thought to be facing a very sharp decline.
The Month Has Started For MATIC
MATIC/USD Looking at the technical analysis, it seems that the situation is very dangerous. There is an inverted cup handle formation in the MATIC formation. This pattern is generally perceived as a signal that the end is over and the decline can begin from there. If everything proceeds as predicted, there may be a very sharp decrease of 50% in the continuation of this formation.
If MATIC loses its support at the point seen as the “handle” zone, it will enter a new bearish line after that. Looking at the technical analysis, it is seen that the mentioned support point is located at the $0.86 point. MATIC has been losing value especially since the beginning of 2022 and has fallen into this situation with the increasing competition between L2 protocols.
The 200-day EMA is also currently trying to hold the price, but closing below $1 will put a lot of things at risk for MATIC.
Looking at the on-chain data, it is seen that the number of active wallets in the Polygon network is constantly increasing. While there were 759 active wallets at the beginning of 2021, this number currently averages 300,000 and the number of users is increasing. In addition, MATIC’s significant investments in 2021 may increase network usage.
*Not Investment Advice.