MATIC Price has breakout potential as Polygon increases utility

The market had high hopes for the Polygon network, especially after it dwarfed the Ethereum blockchain. While the network’s growth is commendable, the Layer 2 solution connecting Ethereum to other blockchains has suffered significant setbacks after the network’s validators recommended increasing transaction fees to prevent block spam transactions. MATIC

What’s new in Polygon?

After Sandeep Nailwal, co-founder of Polygon, made a recommendation to increase gas usage, the network saw a dramatic drop in on-chain activity. The average daily trading volume on Polygon fell from over 6 million to less than 3 million, a drop of more than 50%.

Source: Polygonscan

However, Polygon still makes up the highest percentage of Total Value Locked (TVL) on Ethereum bridges. Last week, the number of wallets on Polygon rose sharply and reached around 97.7 million wallets, reducing the gap to Binance Smart Chain (BSC) to around 695,000 wallets.

Source: Coin98 analysis

In fact, Polygon has maintained its dominance over arbitrum and optimism about TVL in the Ethereum Bridge despite a slight decline. However, Polygon’s TVL fell 8.3% from last week to $ 4.46 billion, largely due to DEX indices.

Source: Coin98 analysis

However, despite the decline in daily transactions, the network retains its dominance, so traders expect a positive impact on the price of MATIC.

The prices are still stagnating

After three recent “virtual” price peaks, MATIC seems to be showing signs of fatigue. Since hitting a multi-month high of $ 1.79 on September 5, the altcoin has hit lower lows while repeatedly provoking a potential breakout.

Even so, MATIC stayed above the critical $ 1.20 throughout October; in fact, the token was up 5.76% in the 24 hours at press time, but down 1.54% on a weekly basis. While the MATIC price is unlikely to make any major moves, the networking utility might be driving the price action.

Recently, Polygon Studios, Polygon’s gaming and development arm, partnered with Unicly (UNIC), which is expected to whitelist NFT projects based on Polygon and be incentivized through UNIC rewards.

In the midst of the NFT boom, high societal expectations for protocols that make NFT even more useful are a prominent trend. With this partnership, it seems that Polygon is enhancing the usefulness of the network. In fact, Unicly can offer more solutions to Ethereum’s gas fee problem.

Based on these developments, it is to be expected that MATIC will have breakout potential, especially after a consolidation of more than a week. However, a low transaction volume paired with low expectations in the midst of a growing network still hinders growth.

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