For weeks, Polygon (MATIC), the Ethereum scaling fix, has been a buzz. Its daily active count, which exceeds 1.4 million and is evidence of the network’s expanding user base, lately peaked. For MATIC, this increasing activity offers a story of two sides.
Polygon’s Busy Streets: A Sign Of Growth Or Gridlock?
There is indisputable high traffic on Polygon’s virtual streets. The constant daily active addresses exceeding one million point to a healthy ecology. On closer inspection, though, one finds a possible bottleneck. Transaction fees have slumped while user count has exploded. The network’s income suffers as a result of this dip in fees, which calls questions regarding Polygon’s long-term viability.
JUST IN: Polygon PoS has recorded a new all time high in daily active addresses with 1.4M — Today In Polygon (@TodayInPolygon)
The narrative continues somewhere. The Total Valuelocked (TVL) in Polygon’s Decentralized Finance (DeFi) systems has dropped even with the network’s busy activity. This could point to DeFi whales’ cautious approach, reluctant to commit their funds entirely in the state of the current market.
MATIC Bulls Charge In, Waving Green Flags
MATIC bulls are pushing ahead even with underlying issues. The price of the token surged by 8% over the past 24 hours; for now, it sits around $0.71. One could ascribe this positive momentum to increasing purchase pressure.
Data suggests point to a decline in MATIC supply on exchanges as well as a rise in holdings by big investors—whales. This change reflects investor belief on Polygon’s future possibilities.
MATIC market cap currently at $7 billion. Chart:
Technical Indicators Flash Bullish, But Caution Remains
Technical indicators also show MATIC a positive picture. All of the Chaikin Money Flow (CMF), Money Flow Index (MFI), and Moving Average Convergence Divergence (MACD) hint to a possible increasing trend.
The Road Ahead: Can Polygon Navigate The Challenges?
Polygon is at a crossroads. Though the great activity of the network is encouraging, the drop in fees and DeFi TVL causes questions. For MATIC investors, the recent price rise and positive technical signals give some hope. Still, negotiating the erratic bitcoin market calls for carefulness.
Featured image from Pixabay, chart from TradingView