MATIC Doing Well After Separating from Ethereum: Can (OP) Keep Pace?

POLYGON MATIC

Ethereum’s Dencun upgrade, introduced on March 13, significantly reduced fees for using layer-2 (L2) networks like Optimism (OP) and Polygon (MATIC) zkEVM. Following the upgrade, fees on these networks plummeted to less than $0.01 and $0.39, respectively.

Claim Instant 100,000 Chika Tokens $100 Free New Memecoin , Claim Airdrop Now On ChikaMoji.lol

However, despite the optimistic outlook, QCP Capital predicts a potential price drop for Ethereum (ETH). As a result, ETH has declined by over 2%, with OP also dropping by more than 4%. Surprisingly, MATIC has maintained minor gains amidst this market turbulence. This raises questions about which cryptocurrency will benefit most from Ethereum’s Dencun upgrade.



Polygon (MATIC) Shines with Record Daily Active Addresses and TVL

Polygon (MATIC) gained significant attention as its Proof of Stake (PoS) network achieved a new milestone, surpassing 1.23 million daily active addresses. This remarkable feat marked the PoS chain’s maintenance of over a million daily active addresses for 20 consecutive days. Consequently, following this announcement, the price of MATIC surged to $1.26, its highest level since February 2023.

Moreover, the Total Value Locked (TVL) in Polygon (MATIC) zkEVM experienced a notable uptick post-Dencun, reaching a new all-time high of $185 million. This increase in TVL further solidified Polygon’s (MATIC) positive trajectory.

In addition to these achievements, data from Dune Analytics revealed sustained interest and engagement in Polygon’s NFT ecosystem. Despite market fluctuations, the volume of Polygon NFTs traded remained high, underlining continued enthusiasm for Polygon’s NFT offerings.

Analyzing MATIC: Cautiously Optimistic Outlook

MATIC’s technical analysis presents a cautiously optimistic outlook as it navigates between its key support and resistance levels. Currently trading between the first support level at $1.04 and the first resistance level at $1.335, the altcoin demonstrates a positive trend.

Source: TradingView

The alignment of Exponential Moving Averages (EMA) further supports this sentiment. With the 10-day EMA at $1.238, the 50-day at $1.182, and notably, the 200-day at $1.05, a bullish momentum appears to be forming.

Moreover, indicators like the MACD level at 0.021 and Momentum at 0.058 subtly lean towards the positive side, indicating the potential for continued upward movement.

Despite these encouraging signs, caution is warranted as indicated by the Relative Strength Index (RSI) hovering at 55.45, signaling a neutral to slightly bullish sentiment.

The Stochastic %K at 70.1 creeping towards overbought territory suggests the possibility of price pullbacks, adding to the sense of caution.

Furthermore, the Average Directional Index (ADX) at a low 15.75 reflects a lack of strong trend direction, contributing to market uncertainty.

Supporting this view, the Commodity Channel Index (CCI) at 48.97 adds to the narrative of prevailing market uncertainty, emphasizing the need for careful monitoring of MATIC’s price movements.

Outlook for Polygon (MATIC): Bullish and Bearish Scenarios

Bullish Scenario: Looking ahead, Polygon (MATIC) could pursue a bullish trajectory, aiming to surpass the resistance level at $1.335 and target $1.44. Further optimism may drive MATIC towards the $1.735 mark, supported by positive sentiment surrounding its expanding ecosystem and liquidity. The sustained high activity in its NFT market adds to the potential for upward movement.

Bearish Scenario: Conversely, in a bearish scenario, if Polygon (MATIC) struggles to maintain its current level and dips below the support level at $1.04, it may face downward pressure. This could lead to a retest of lower support levels, notably at $0.85 and potentially $0.554. Such a scenario may unfold if broader market sentiment weakens or if investors opt to take profits following recent highs.

Optimism (OP) Network’s Strategic Token Sale and Market Reaction

Optimism (OP) Network, renowned for its innovative scaling solutions for Ethereum, recently made headlines with its strategic private token sale, where approximately 19.5 million OP tokens were sold. The details of this sale were disclosed on the Optimism governance forum on March 7, 2024. Notably, these tokens come with a two-year lockup period, although they can be delegated to third parties for governance purposes.

Interestingly, just before this announcement, the OP token had surged to an all-time high of $4.85 on March 6, 2024. This significant increase in Optimism’s (OP) value coincided with a broader market rebound, indicating a restoration of investor confidence after a period of uncertainty.

Technical Analysis of Optimism (OP) Token: Current Outlook

Optimism (OP) token finds itself in a delicate position from a technical analysis perspective, oscillating between its first support level at $3.874 and the first resistance level at $5.036.

Source: TradingView

The 10-day and 50-day Exponential Moving Averages (EMAs) are slightly above the current price, signaling potential bearish pressure. In contrast, the 200-day EMA lies below, providing a bullish perspective.

With the Relative Strength Index (RSI) at 36.99, the token is approaching oversold territory, implying a potential upside.

However, the Average Directional Index (ADX) at 25.7 indicates a lack of a strong trend, while the Commodity Channel Index (CCI) at -146.92 suggests an oversold market condition.

The MACD level and Momentum indicator further emphasize the prevailing market uncertainty surrounding Optimism (OP) token.

Potential Scenarios for Optimism (OP) Token: Bullish and Bearish Outlook

In a bullish scenario, if Optimism (OP) manages to surpass the resistance level at $5.036, it could signify renewed investor confidence in Optimism’s technology, particularly its role in enhancing Ethereum’s scalability. Further breakout above $5.53 and $6.692 levels might be fueled by the “buy the dip” sentiment following a recent price decline post-Dencun upgrade.

Conversely, a bearish outlook could see Optimism (OP) retesting its lower support levels, particularly at $3.206 and $2.044. This potential downturn may occur as the market digests the implications of the private token sale and adjusts to broader market trends.

Conclusion

Following Ethereum’s Dencun upgrade, which slashed fees on layer-2 networks, Optimism (OP) and Polygon (MATIC) experienced significant cost reductions, fostering a favorable environment for their growth. However, QCP Capital’s cautionary stance on Ethereum’s future price hints at a potential decline, casting uncertainties. Amid this backdrop, MATIC maintains an upward trajectory, while OP mirrors Ethereum’s slight downturn. This mixed market reaction raises questions about who will benefit most from Ethereum’s latest development: Polygon (MATIC) or Optimism (OP).


Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.

 

Join Cryptos Headlines Community

Follow Cryptos Headlines on Google News

 

Author

  • SHBAZ

    A crypto enthusiast, Loves to write, Loves to explore and stay up-to-date about the latest developments in the crypto world. #Btc #Crypto #NFT

Leave a Reply

Your email address will not be published. Required fields are marked *