Can MATIC fuel a rally like the one in May 2021?

MATIC has had an interesting price trend since the end of November, while the asset is currently near all-time highs, there are also some weaknesses in addition to strong market indicators. Hence, it is necessary to analyze several key market signals in order to properly assess the immediate trend of this token.

MATIC closes the week after the flash crash

Source: trade view

While Bitcoin, ETH corrected sharply on December 3, the value of MATIC rose 6.92%. The next day, Polygon’s token fell 13%. However, on December 5, the asset closed its biggest week at $ 2.05. Although it failed to hit the ATH of $ 2.70, the price recently peaked at $ 2.57.

On the other hand, the bullish price seems to be mainly due to the general market situation, but on-chain indicators tell a different story. follow mood, the background to MATIC is extremely optimistic as the token remains in pricing and has the potential to move towards a new ATH.

Source: Antiment

The number of daily active MATIC addresses is currently over 10,000, which corresponds to the status of May 2021. In addition, Polygon’s network growth rate is very strong as more than 3.7,000 addresses interact with MATIC every day. Social volume has not reached the same level as before, but there are signs that the market will enter another phase of acceleration.

Compared to May 2021, it is very similar for MATIC to find the best price range again during the BTC correction. With BTC currently consolidating below $ 50,000, MATIC could be bullish in the short term.

Is there room for growth?

Source: DeFi Lama

In May 2021, Polygon was still considered an emerging protocol, but has gradually caught up with other projects over the past 6 months. Comparing the M.CAP / TVL (Market Capitalization / Total Value Locked) ratio, it seems that MATIC doesn’t have much room for growth compared to competing chains.

A lower M.CAP / TVL indicates that there is sufficient scope for TVL in the project. However, at the time of writing, Polygon’s rate is higher than Ethereum’s. Only BSC and Solana had higher values ​​at the time of the analysis. In addition, competing networks such as Avalanche and Terra have lower tariffs, which leaves more room for TVL.

Enjoy until the end

It’s difficult to gauge MATIC’s immediate trend. Despite the optimistic fundamentals, a lack of uniqueness or user base can hamper pricing. MATIC decided when the opportunity arose, namely on December 5th. Now, however, it could actually go down again, which is being dragged down by the industry-wide bear market.

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