Polygon (MATIC) Price in Danger Zone: Reasons and Predictions
The price of Polygon (MATIC) has dropped below $0.55, its lowest point since July 2022, as investors shift their focus to newer Layer-2 (L2) networks. This has been influenced by regulatory disputes with the US SEC and the emergence of networks like Optimism, Arbitrum, and Base. Despite efforts such as appointing a new CEO and migration to a new native token, MATIC’s price continues to decline.
Key reasons for MATIC’s price decline:
- Polygon’s Network Growth has slowed down, with the number of new addresses registering at a two-year low.
- Alternative L2 networks are attracting new users, posing obsolescence risks to Polygon.
- MATIC holders are preparing for more sell action, as evidenced by increased deposits into exchanges.
- The decline in Polygon’s network growth may result in a lack of demand to absorb selling pressure.
Considering the negative performance and widespread losses among current holders, MATIC’s price could potentially freefall to $0.50. However, if a bullish momentum occurs and the price rebounds above $0.65, there may be a chance for recovery.
Hot Take:
The decline in MATIC’s price is a result of various factors, including competition from newer networks and a lack of growth in Polygon’s user base. The increased sell action by MATIC holders and the potential for a panic sell-off further contribute to the downward trend. While there is a possibility for recovery, the current outlook suggests that MATIC’s price may continue to face challenges in the near future.
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