After the rise in Ethereum prices, Polygon had its best performance in a long time. MATIC prices rose more than 60% in the past week, making it rank among the top crypto performers. Many investors are asking why this sudden rise in prices? Why is MATIC up? In this MATIC price prediction, we look at the technicals and fundamentals.
What is Polygon MATIC?
Polygon is an Ethereum network scalability solution. The Ethereum blockchain was the first to implement smart contracts, making Ethereum the undisputed leader in decentralized applications. However, as the number of smart contracts has grown, Ethereum has struggled to make transactions speedy and efficient. The Polygon network was born out of this.
Polygon is a layer 2 solution that offloads the Ethereum blockchain using a second level and many sidechains. Polygon’s so-called “plasma chains” are particularly crucial. These Ethereum sidechains take the smart contracts off the Ethereum network. If necessary, developers of decentralized applications and smart contracts might outsource their labor to the Polygon network. This addresses Ethereum’s scalability issues.
Why is MATIC up?
In another article, we spoke about how Ethereum gained massively overnight thanks to news about Ethereum 2.0 surfacing. This is massive as all projects related to Ethereum’s ecosystem are going to also flourish. Polygon is a project that is built on top of Ethereum as a sidechain. Any positive news in Ethereum’s ecosystem will definitely boost Polyon’s credibility.
From a technical perspective, MATIC prices were heavily discounted for a long time. MATIC was bound for a price increase after hitting the strong support of $0.35. After Ethereum started to increase, MATIC shot higher and reach the current price of $0.95, eyeing the psychological price of $1.
MATIC Price Prediction – Will MATIC reach $2 next?
After such a strong price increase, one must always anticipate a price correction. Plotting the Fibonacci retracement, we can expect that prices adjust back towards $0.85 as part of the 23.6% retracement. If this level is reached, prices might adjust further lower towards as far as the 50% retracement around $0.67.
This case scenario takes into account a weak crypto market for the coming few days. However, this week started strong and the probability of having a bearish trend is low.
Should you BUY Polygon after such a hike in Prices?
It is advisable to wait for prices to take a breather and retrace lower following the above-mentioned Fibonacci areas. This will ensure a good entry at a good price. However, if you feel that you really want to enter without missing the current price, you can do so while placing a very tight stop-loss around $0.90.