It’s an unsurprisingly bearish start to the day for Polygon (MATIC) as investors stay away from the market amid a sharp decline in Bitcoin prices, despite several strong fundamental developments that can foster its adoption. At the time of writing, MATIC/USD is trading around $1.83.

Polygon Acquires ZK Startup Mir Protocol

Polygon is investing heavily in the zero-knowledge rollup (ZK rollup) space as it believes that it has the potential to solve Ethereum’s network congestion and scalability challenges. A few months after acquiring Hermez Network, the company has made its second acquisition in this area recently, in the form of ZK-Proof startup Mir Protocol. The $400 million acquisition will see a rebranding as Polygon Zero. Its technology is exciting as it provides a transaction ledger without the need to store all data on the Ethereum blockchain, thus reducing space blocking and gas fees when processing transactions.

Mir Protocol’s acquisition is one among many initiatives Polygon plans to undertake after it set aside $1 billion to develop ZK technology. Its investment into this area aims to help the layer 2 scaling solution become the leading contributor which can help Ethereum achieve the milestone of supporting one billion users.

In addition to strong fundamentals that can support the adoption of Polygon’s technology in the coming weeks and months, technical analysis by an autonomous bot called Real Vision Bot also reveals an increasing preference for the MATIC tokens among traders lately. Polygon’s native token ranked fourth among the top five cryptocurrencies traders wish to include in their portfolios, with Ethereum coming in first in the list.

There may still be hope for MATIC to rebound higher soon, as we see small spikes of increased trading volume in the token since the beginning of this week. In case Bitcoin manages to make its way back to $50,000 soon, we could see the return of buyers into the crypto market, which could drive up some interest in Polygon and take its price back up again.

MATIC/USD Technical Analysis

On the H4 chart of MATIC/USD, moving averages along with leading technical indicators MACD and momentum are suggesting a strong bearish bias. Polygon’s price remains well below the pivot point at $2.12 and quite some distance from the key $2 level as well.

However, the immediate support at $1.67 is holding up nicely for now. We may see a breakdown of this level if the mood in the crypto market turns more bearish soon.