Polygon: Can MATIC’s recent price rally push it past the $1 resistance?

KEY TAKEAWAYS:

• Polygon’s MATIC has been one of the strongest performers amid the raging bear market in the crypto world right now.
• In fact, from its YTD lows, MATIC price has been able to consistently outperform some of its biggest peers and competitors in terms of market cap.
• MATIC price has rallied nearly 300% from its YTD lows to its recent highs and since then has fallen slightly but nothing very concerning.

Polygon is one of the world’s most popular Ethereum based layer 2 scaling solutions to ever exist. It is so popular that it even featured on the Disney’s Accelerator Program 2022 as the only blockchain firm to feature on that list. Alongside that, it is one of the most popular, widely accepted and used layer 2 scaling solution and thus boasts of an impressive market capitalization of over $8 billion as of writing.

Polygon is trying to solve a very pertinent problem that is plaguing participants in the Ethereum ecosystem – that is of skyrocketing transaction costs and decreased transaction speeds. Polygon is trying to solve that and effectively create a layer 2 ecosystem that supports Ethereum compatible projects to make them cheaper and more efficient – something that is very much needed as the world of DeFi is growing bigger and more mainstream every day.

MATIC TECHNICAL OVERVIEW

MATIC/USD | Source: Tradingview

Between June and August 2o22 – MATIC price had been on an incredible rally, more than doubling its value in under two months. But since then, MATIC has been in a sideways trend all the way till the beginning of November, when the token price rallied in the first few days, in line with the overall market movement and quickly came crashing down post the FTX collapse. With that context out of the way, from a technical standpoint – MATIC price still looks decently strong and can support a bullish momentum whenever it arrives.

This is because firstly, in the beginning of November, before the FTX collapse triggered crash took place – there was a golden crossover that happened of the 50 and 200 day moving averages which is an extremely bullish breakout from a technical standpoint. Now, despite the fact that MATIC price has lost all the gains it made in the early days of November – the golden crossover still holds strong and the past 24 hours has also resulted in a breakout of the price above the crossover. The Relative Strength Index is also at a reasonably strong position around 52 as of writing to support continued upward move. Just one thing to note is that the $1 mark would serve as a strong region of resistance as it has held strong for over 6 months now.

Now let’s check out some of MATIC’s promising on-chain metrics that indicate that the rally could continue!

Read more: Polygon Price Prediction

MATIC’S DEVELOPMENT ACTIVITY REACHES ALL TIME HIGH!

MATIC Development Activity | Source: Santiment

One of the most positive developments for the MATIC token has to be the fact that its development activity is at an all time high. According to official definition, the development activity of a project – is done in its public GitHub repositories. These public repositories can essentially be tracked and the pace of development of the crypto project is tracked through how many repository updates were made in the interim.

This metric helps us clear the clutter around a project too – mainly because a developer’s time is a very expensive asset in the crypto world. So a high development activity directly means that the project is serious about its business. Secondly, it means that it has a higher probability of shipping out new features and products in the time to come and thirdly – the chances of it being an exit scam is lower.

MATIC’S SUPPLY ON EXCHANGES ON A STEADY DOWNTREND

MATIC Supply on Exchanges | Source: Santiment

Another very optimistic on-chain metric that we find is that MATIC’s supply on exchanges as a percentage of total supply out there is on a steady downtrend too. This is a very positive sign because it means that people are removing their coins from exchange wallets and moving them to their private or cold wallets – indicating a HODLer mentality. This is because transfer of crypto from wallet to wallet involves time, effort and money and hence only serious investors with the intention to HODL undergo this process.

Read more: Top Cryptos with Lowest Transaction Fees

CONCLUSION

Thus in conclusion, it is very evident that on-chain fundamentals for this coin seems extremely strong, given the steady increase to create new all-time-highs in the development activity and a dipping of supply on exchanges as a percentage of total supply in the market. Also, on the technical front, it can be agreed that while it’s not the most ideal of bullish scenarios, but current technical structures indicate that a continued bullish action from here could be sustained for the immediate short term.

Price as on 1 December, 2022.