Polygon price has been in a downward development up to now few months because it continued to lose market share within the layer-2 trade.
MATIC dropped to the important thing support at $0.4343 on Friday and has since pared again a few of these features. Nevertheless, It stays round 60% under its highest level this yr and 82% under its all-time excessive.
Competitors within the layer-2 trade
Polygon, one of many pioneers within the layer-2 trade, has come beneath stress up to now few years because the variety of opponents has risen.
Its whole worth locked (TVL) within the DeFi trade has dropped to $872 million from a document excessive of just about $10 billion. In MATIC phrases, the TVL has dropped from a document excessive of 5.7 billion to 1.78 billion as we speak.
Arbitrum, a number one layer-2 community has attracted 661 DeFi builders whereas its whole worth locked stands at over $3 billion.
Polygon has additionally been handed by the likes of Base and Blast, which have $1.4 billion and $1.2 billion in property, respectively. Optimism has additionally taken some market share from Polygon.
This competitors partially explains why the MATIC price has dropped by 82% from its all-time excessive.
Despite these challenges, Polygon has some encouraging on-chain metrics. For instance, information exhibits that it has over 1.09 million addresses, making it the second-biggest chain after Tron, which has 2.09 million addresses.
The opposite encouraging determine is that the variety of transactions within the community have been secure. These each day transactions have remained over 3.8 million since March eleventh this yr.
Additionally, the quantity of stablecoins has been in a strong upward development since October final yr. As proven under, the volume has risen from 1.17 billion MATIC to over 1.8 billion on Tuesday. Stablecoins are essential in a blockchain since they’re used to deal with most transactions.
Stablecoins in Polygon
Polygon additionally has the next staking yield than most cryptocurrencies. It has a staking yield of 5.67%, in comparison with Ethereum’s 3.29% and Cardano’s 2.9%.
Polygon price has misplaced a key support
Polygon price chart
Despite these strengths, the Polygon price has dropped sharply up to now few weeks. It has additionally dropped under an essential support degree, doubtlessly invalidating a double-bottom sample that has been forming.
It dropped under the important thing support at $0.50, the place it did not drop under in June and October 2023. Except this drop is a false breakdown, there’s a probability that Polygon will proceed falling and attain the following support at $0.3206, its lowest level in June 2022 and 37% under the present degree.