The first quarter was going well this year for the scaling solution – Polygon – native token MATIC. However, this bullish run quickly changed direction as the token lost around 40% of its value in Q2.
Nevertheless, recent news might see redemption for the layer-2 blockchain native token with the new Polygon zkEVM mainnet rollout, which can drive MATIC prices higher. But how? and for how long?
MATIC is the native currency for the Polygon network, a layer-2 blockchain that overcomes much of the scalability challenges of the Ethereum blockchain.
Polygon’s native token, MATIC, is an ERC-20 token operating on the Ethereum blockchain and is the central currency for Polygon, which combines proof-of-stake and Plasma framework for transaction validation.
MATIC’s price is usually associated with the development and activity on the Polygon network. Therefore, Polygon’s scalability opportunities have positively affected the MATIC price, boosting it north of $2.5 by the beginning of 2022.
However, the crypto crash of 2022 affected blockchain activities as many crypto projects were suspended or defaulted, pushing MATIC value just under the $1 mark.
The bullish run for MATIC that started at the beginning of this year ended in February, around the date the new Polygon zkEVM network was announced.
Despite the expectations that the new announcement would pick up the token and that the MATIC price prediction went beyond the roof, the token has declined since then.
The token price saw some hope in mid-July, with a short-run bullish movement picking up the price almost to $0.9. This sentiment was accompanied by a short-term breakthrough of the 10-day EMA line above the 50-day EMA indicators. However, it took only a few days for this line to change direction.
Currently, the price line lies below the three exponential moving average lines of 10 days, 50 days, and 200 days, indicating that the price is only moving downward for the foreseeable future.
The zkEVM, or a zero-knowledge Ethereum Virtual Machines, is a validation process of the ETH blockchain that allows validation outside the mainnet. However, this protocol ensures that validation is according to the rules of the mainnet EVM to ensure blockchain security.
zkEVM is a cryptographic method that enables computers to confirm their knowledge of a transaction without disclosing its information. In other words, it allows nodes to validate a transaction according to the ground rules without knowing what’s inside this transaction, ensuring data safety and security.
This breakthrough innovation allows developers to launch and share dApps and Web3 projects on different platforms and connect them to the Ethereum blockchain, empowering blockchain interoperability.
Last year, Polygon announced the Polygon zkEVM testnet on its network, which would further expand the scaling capability of the Polygon network. Since then, more projects have shown interest in launching their projects and cooperating with the anticipated zkEVM.
In March 2023, Polygon announced the rollout of zkEVM to the mainnet, encouraging more interoperability between blockchains, especially with the Ethereum blockchain.
This announcement was supposed to pick up the native token’s price. However, we only saw a 1-week price increase in mid-April around the announcement date, where the 10-day EMA crossed over the 50-day EMA.
There has been an increase in the on-chain transactions since the announcement, which wished for recovery of the MATIC price. However, this has never happened yet.
Therefore, the MATIC price prediction of $100 may seem far from reality, considering that the all-time high price of MATIC is just $3, and the current MATIC price in September 2023 is $0.5456.
MATIC definitely needs more time to recover from this year’s loss, and Polygon’s new announcement needs more time to build reliability and trust among the Web3 community before we see any price increase.