MATIC, the coin for Polygon, took an 8% dive today (14 January) as it moves further away from its recent all time high of $2.92 on 27 December.
The coin for the framework, which aims to enhance interoperability between the Ethereum blockchain and compatible networks, had a turbulent December but late on found a stronger upward momentum putting on a 30% growth spurt. The new year started badly and although the slide was stemmed by a brief recovery this week, the price resumed its downwards pitch.
The news that Uniswap, the protocol for exchanging cryptocurrencies, had gone live on Polygon may have helped. "All Uniswap V3 contracts are now deployed to the Polygon PoS mainnet, and Polygon is already supported in the official Uniswap interface," said the statement.
In a tweet it added there were three key reasons why the organisation regarded it as a landmark: a major acknowledgment for Polygon, a return to the original promise of Ethereum, and a stronger Polygon DeFi ecosystem.
Follow our detailed Polygon price prediction and explore the latest Polygon (MATIC) news to help you decide whether it deserves a place in your investment portfolio.
Polygon (MATIC) technical analysis
MATIC was one of the cryptocurrency gainers this year. During 2021 the price surged from $0.01 on 1 January 2021 to its highest level of $2.92 (27 December).
MATIC, Polygon’s native token, spiked around 760% up in a four-week long surge, rising from $0.34 on 20 April 2021 to an all time-high of $2.68 on 18 May 2021.
Following its record high, MATIC plunged to $1.09 on 23 May, but soon rebounded on 26 May 2021, reaching $2.21. The token’s price gradually descended to $0.69 by 20 July 2021, but has been gaining traction since then.
By the end of October, the MATIC price hit a new high of $2.13. The token has lost some of its strength since then, moving from 2.13 on 28 October to $1.58 in November 2021. A surge in December took it to $2.92 - a new all time high - before falling back to $2.15.
Will the MATIC token manage to break through the latest pressure and restart a bullish momentum in 2022?
Considering the short to mid-term Matic to USD forecast for this year, traders should look out for several support and resistance levels.
As of 14 January, the nearest support level is at $2.02, then at $2.01 according to CoinCodex. The nearest resistance level is at $2.38, then at $2.57. It Polygon price prediction was neutral with 17 technical analysis indicators giving bullish signals, and nine bearish signals.
Polygon (MATIC) major price drivers
The recent price surges might have been triggered by recent Polygon (MATIC) news.
On 19 August 2021, Polygon Network announced the creation of a decentralised autonomous organisation (DAO). According to Polygon, the system aims to form committees, promoting discussion between projects like Sushi, Aave, QuickSwap and more to “bring DeFi to the next million users”.
On 14 September 2021, Ernst & Young (EY) and Polygon announced a joint project to develop and implement scaling and enterprise solutions for the Ethereum ecosystem. As part of this initiative, “EY and Polygon will work on Polygon Nightfall, a public, privacy-focused Rollup. In addition to this, EY will offer its other flagship blockchain products on Polygon and jointly develop new Polygon-based blockchains for enterprise use.”
On 20 October 2021, San Francisco-based digital asset management company Bitwise Asset Management announced the launch of its Bitwise Polygon Fund (MATIC). According to the company’s press release, the Fund will serve as a professionally managed investment vehicle that will give wealthy Bitwise clients access to MATIC, Polygon's own cryptocurrency.
On October 29, Polygon shared its latest user growth update. According to the company’s data, Polygon had “83.14% of the active addresses relative to Ethereum”. Polygon experienced higher daily average users relative to Ethereum since 1 October.
On 18 November 21Shares, the issuer of crypto exchange-traded product (ETP), listed a product linked to the performance of polygon on the Six Swiss Exchange. On 1 December it listed its polygon ETP on the Euronext exchanges in Paris and Amsterdam.
On 20 November Polygon proposed to the DeFi protocol, Uniswap that it deploy to Polygon PoS. The UNI community agreed so the move is now expected shortly. Other major protocols such as Aave and Sushiswap have already migrated to Polygon in a bid to avoid Ethereum's relatively high transaction fees and slow speeds, and congested network.
On 30 November IDEX, the decentralised exchange, announced that it was launching v3 of its exchange on the Polygon network, claiming it is the world's first hybrid liquidity DEX.
On 7 December Polygon announced a strategic partnership with decentralised blockchain interoperability solution, Wanchain to "drive further adoption of Layer 2 cross-chain bridges and accelerate the development of interoperable blockchain technology as a whole".
Polygon said on 8 December that it will feature on ClayStack, a decentralised liquid staking platform, when it launches its Malawi Testnet this month. ClayStack's platform allows users to stake their crypto assets while maintaining their liquidity as they receive an equivalent liquid derivative token that remains fungible and transferable and earns daily rewards - in this case the csMATIC which can be used within Polygon's DeFi ecosystem.
On 9 December Polygon announced that Mir, a startup in ZK (zero knowledge) cryptography technology, has been acquired in a $400m deal. Mir engineers will now be part of the team that will use this technology to help build Polygon Zero, a "highly-scalable, Ethereum-compatible ZK Rollup".
On 20 December Polygon announced that Uniswap, the protocol for exchanging cryptocurrencies, is now live on Polygon. "All Uniswap V3 contracts are now deployed to the Polygon PoS mainnet, and Polygon is already supported in the official Uniswap interface" said the statement.
On 29 December Polygon revealed that two white hat hackers had exposed a critical network vulnerability which it then fixed on 3 December. Polygon said the malicious hacker was able to steal 801,601 MATIC before the network upgrade took effect. It added that it had paid around $3.46 million as a bounty to the two white hats who helped discover the bug.
On 10 January Polygon revealed Plonky2, what it called a major milestone for zero-knowledge cryptography. Plonky2 is a recursive SNARK (a cryptographic proof that one user has some specific information without having to reveal what that information is) that is "100x faster than existing alternatives and natively compatible with Ethereum."
MATIC price prediction: analyst sentiment
“Scalability is a major problem with most of the top cryptocurrencies, especially bitcoin (BTC) and ethereum (ETH). Most likely, the first founders of digital currencies had no idea that their creations would become so popular that they could barely handle the load on the network. That is why any working solutions that reduce the load on the network, and at the same time increase the speed of transactions and reduce their cost, are highly appreciated and welcomed by the community,” said Mikhail Karkhalev, Capital.com’s analyst.
“However, the transition to Ethereum 2.0 is quite a long process and will not solve all the problems at once. In addition, the founders of Polygon have set themselves the very ambitious goal of making the project literally the internet of blockchains, allowing them to interact with each other. Similar projects already exist, like cosmos (ATOM) or polkadot (DOT), but so far such solutions have no real use and are far from perfect.”
Karkhalev believes that investing in a relatively young cryptocurrency project should be considered with caution.
“When investing in a startup, it's important to remember that ambitious plans don't mean the project will actually accomplish its goals and become a leader in its field. Polygon is a promising project, but it is important for investors to keep an eye on how the team achieves its goals,” he says.
MATIC coin price prediction: 2022, 2023, 2025, 2030
Several algorithm-based forecasting services share MATIC crypto price forecasts for this year and beyond as of 14 January.
GovCapital believes MATIC could rise to $4.26 in a year's time then it may hit $12.5 by January 2027.
Wallet Investor expects MATIC to be an “awesome” long-term investment. According to its Polygon crypto forecast, MATIC could hit $4.2 by next January. It suggests that by the start of 2027 it could hit $12.45.
DigitalCoin also holds a bullish view on the Polygon (MATIC) crypto price prediction, expecting a gradual increase in 2022 to average $3.19 and go on to $3.6 in 2023, and $4.76 in 2025. Although none of the services provide price targets for 2030, Digital Coin’s most distant price prediction is for $9.7 by the end of 2029.
When looking for MATIC price predictions, it’s important to bear in mind that analysts’ forecasts can be wrong. Analysts’ projections are based on making a fundamental and technical study of a crypto’s performance. Past performance is no guarantee of future results.
It’s important to do your own research, and always remember that your decision to trade depends on your attitude to risk, your expertise in the market, the spread of your investment portfolio and how comfortable you feel about losing money. You should never invest money that you cannot afford to lose.
What is Polygon crypto?
Formerly referred to as Matic Network (it was rebranded in February 2021), Polygon is a layer-2 network developed to add additional scalability to Ethereum and improve interoperability between its blockchains.
Polygon describes itself as “Ethereum’s internet of blockchains” – an easy-to-use platform for Ethereum scaling and infrastructure development.
Polygon strives to solve some of Ethereum’s major drawbacks, including poor user experience (delayed transactions), insufficient throughput and lack of community governance, with a new sidechain solution.
The platform’s core element is Polygon SDK, a flexible modular framework that contributes to the creation of numerous types of applications. With the use of Plasma side chains (designed to facilitate off-chain transactions, making them fast and cost-effective for blockchains), Matic Network built an environment that enabled cheaper, easier and the faster launch of decentralised applications (dApps). The Matic solution was backed by high gas fees on Ethereum and increased demand in the development of dApps.
Polygon has created a layer-2 network for developing Ethereum-compatible and interoperable blockchain networks. Its modular framework enables builders to create sovereign blockchains with customisable functionality.
The platform boasts scalable consensus algorithms, modular “security-as-a-service” features and a bespoke WASM execution environment. It means Polygon is capable of creating enterprise-ready blockchain networks and delivering cost-efficient and fast transactions.
What are layer-2 solutions?
When we talk about blockchain scaling solutions, they are usually split into two levels: layer-1 and layer-2 solutions. Layer-1 refers to scaling functions within the blockchain itself by means of novel consensus algorithms and increasing block limits. Layer-2 scaling solutions refer to off-chain solutions. They remove elements of computational power from the main blockchain, before being executed on side-chains. This helps to increase throughput on the main chain.
Layer-2 solutions, including Polygon, have been gaining popularity and are considered critical to the mass adoption of cryptocurrencies.
Polygon architecture consists of four distinguished layers, each responsible for a range of functions and services used for several purposes.
The Ethereum layer is represented by a set of smart contracts implemented on the Ethereum network. They can handle staking, transaction finality and communicating between various Polygon chains and Ethereum.
The security layer runs alongside Ethereum. It delivers a “validators-as-a-service” role, providing chains with an additional layer of security.
Polygon networks layer
The networks layer serves as a blockchain networks ecosystem developed on Polygon. Each has its own community and handles producing blocks and local consensus.
The execution layer is represented by Polygon's Ethereum Virtual Machine implementation (EVM) applied to executing smart contracts.
Polygon chains can communicate both with the main chain of Ethereum and with one another due to Polygon’s arbitrary message passing functionality. It helps to spur a bunch of new use cases, including interoperable dApps and exchange of value between various platforms.
What makes Polygon special?
Polygon aims to improve blockchain scaling and interoperability. There are several major features that have contributed to the platform’s popularity and positive analysts’ outlook.
Polygon is compatible with Ethereum Virtual Machine (EVM), which makes it useful for those who develop apps on Ethereum and program in Solidity.
Polygon’s security model is optional – there’s no need to sacrifice flexibility for the sake of additional security if not needed.
Polygon claims to be flexible enough to incorporate different scalability solutions beyond Plasma chains, including Optimistic rollups and ZK-rollups.
Speculating on the MATIC coin forecast, it’s worth mentioning that the race for the first and foremost interoperability solution is underway. Polygon’s rivals, Polkadot and Cosmos’ Stargate, are also moving to launch their solutions.
There are different price targets regarding MATIC’s future performance. The cryptomarket is very volatile. The price of MATIC tokens could change suddenly. You should consider all a cryptocurrency’s fundamentals and technical analysis before making your own investment decision.
We do not know. If it can be reached, the MATIC price target of $10 will not happen overnight. The project will have to prove it’s long-term value to increase the adoption rate and make more investors believe that it has a future. It also faces the launch of Ethereum 2 in the mid term which could negate some of MATIC's current advantages.
Both fundamental and technical analyses show a potential for the MATIC token to move upwards. MATIC, just like any other cryptocurrency, is a highly volatile instrument and requires careful consideration before opening a trade.
MATIC was one of the cryptocurrency gainers in 2021. During the year, the price surged from $0.01 on 1 January 2021 to its highest level of $2.92 on 27 December. Considering the long-term MATIC price forecasts, you should conduct your own due diligence of the cryptocurrency and its fundamental value.
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