Polygon (MATIC) Crosses Pivot Point. What’s Next?
Aiswarya Gopan • 2 min read
Early on Monday, Polygon (MATIC) is one of the very few altcoins trading in the green as the rout in the crypto market extends into one more week before the close of the year. At the time of writing, MATIC/USD is trading at around $2.09.
Polygon Rolls Out EIP-1559 Upgrade on Testnet, to Burn MATIC Tokens
There are many exciting developments underway in Polygon’s ecosystem, helping traders remain bullish about the leading Layer 2 Ethereum scaling solution even as leaders in the board experience weak price action under key levels. One of the key developments powering the uptrend is the blockchain network’s announcement to introduce burning of MATIC tokens with every transaction, which will cause a deflationary effect and keep driving up the value of its native token.
The move will be part of Ethereum’s EIP-1559 upgrade which Polygon has already deployed on its Mumbai testnet, introducing annualized burning for 0.27% of its total supply of MATIC. The upgrade will ensure better fee visibility by burning the base fee which fluctuates based on network congestion, letting users estimate transaction costs on the network in a better manner as a result.
Following the announcement of this decision to burn tokens as part of the EIP-1559 upgrade, data from WhaleStats has revealed an uptick in accumulating MATIC tokens among Ethereum whales or large holders. Since the Polygon team announced this upgrade, MATIC has gone on to become among the top 10 tokens held by the 1,000 largest Ethereum wallets worldwide.
More Fundamentals Drive Up Buying Interest in Polygon’s MATIC
Another interesting development powering the rising interest in the MATIC token among investors is the announcement of a $200 million joint initiative between Polygon and Seven Seven Six to invest in Web3 and social media projects. According to Alexis Ohanian, co-founder at the venture capital firm, the fund will focus on developing dApps on Polygon’s ecosystem, especially across gaming and social media.
Meanwhile, institutional interest in Polygon’s MATIC could also soon receive a boost, with ETF and mutual fund manager VanEck launching an ETN for this digital asset. Similar to ETFs, VanEck’s ETNs offer a secure way to gain exposure to digital assets, although they are considered unsecured debt securities.
MATIC/USD Technical Analysis
Leading crypto trading series on YouTube, Coin Bureau, is optimistic about Polygon’s growth potential. According to a recent video, the show’s host Guy forecasts a 2-3x growth in MATIC’s value in the current cycle and possibly grow even more based on its roadmap for the future.
Technical analysis of the H4 price chart reveals a bearish picture among smaller moving averages and the MACD. However, the 50 EMA, 100 EMA, 200 EMA and the momentum indicator point to some buying interest in the market as well.
Polygon’s price holds just above the pivot point at $2.08 and increased buying pressure can take it higher comfortably. The next obstacle buyers will face is the immediate resistance at $2.433, which is some distance away.