Bitcoin and Ethereum aside, every crypto asset in the market has seen continuous mixing in 2021. The difference in market capitalization between some of the top projects is huge. . For example, $ 5 billion in capital is constantly circulating between Cardano, XRP, and Polkadot, and that has been history for most of the year.

However, one project that has declined significantly since the second quarter of 2021 is Polygon. With a market capitalization of $ 13 billion, it currently ranks 19th on the charts.

To analyze its bullish bias, we evaluated the on-chain data and market structure to understand its position.

What is MATIC holding back?

Source: TradingView

If we look at the daily chart we can see that the MATIC price is very stagnant and moving more slowly than other projects. Big coins like Bitcoin, Ethereum, Binance Coin and Polkadot have continuously seen new ATHs since their crash in May, while coin memes like Shiba Inu have also moved into the focus of the market.

However, Polygon is currently consolidating around the $ 1.9 mark. And it’s still 45% away from ATH. The drop in trading volume also appears to indicate the lack of strong buying pressure.

Nevertheless, the indicators in the chain point to a buying opportunity.

Source: Santiment

Polygon’s active addresses have risen steadily over the past few weeks, according to Santiment, although the price has remained more or less the same. At this point, a bullish divergence is possible and the MVRV ratio suggests similar sentiment.

The MVRV will drop to a level that represents a buying opportunity if the market value drops from its true value. Regardless of the current situation, MATIC is currently still very solid.

Is increased competition hampering growth?

Source: Defillama

A common story in 2021 is incremental protocols and flashy blockchains. While many of them have gone home, projects like Terra and Avalanche may have gained some momentum thanks to Polygon. As shown in the graph, both LUNA and AVAX have higher TVL values, and for the Mcap / TVL ratio, both projects are actually undervalued compared to Polygon. (lower rate, more room for growth).

However, the advantage of Polygon is that it is de facto Layer 2 over Ethereum and is supported by Ethereum developers. Polygon was earlier in the industry while AVAX and LUNA were new and unchallenged companies.

Join Bitcoin Magazine Telegram to keep track of news and comment on this article: https://t.me/coincunews

Annie

According to Ambcrypto

Follow the Youtube Channel | Subscribe to telegram channel | Follow the Facebook page