Polygon is a layer two scaling protocol over layer one Ethereum mainnet that helps to make transactions faster and more secure. The main purpose of Polygon is to make Ethereum more scalable for users.
Recent news of creating a hard fork of Polygon also impacts the price because the aim is to make the Polygon more scalable and faster with lower gas fees. That is why poorly performed validators will be eliminated from the network to make it more secure and scalable.
Polygon works on lowering the gas fees because a higher price discourages users from using Polygon at peak hours. It is scheduled to perform on January 17, 2023. After this hard fork, Polygon will take less time for chain reorganization. Though MATIC lost the top 10 ranks, investors are optimistic about its sustainability.
While writing, MATIC was trading around $1.0. In the last six months, the Polygon token has been consolidating between $1.0 and $0.7, which means it is currently trading around the resistance level.
Crypto markets are bullish, so it may break this level, but we do not think it is an ideal time to invest in MATIC until it breaks the resistance and trades decisively over $1.
Technically, candlesticks are forming in the upper Bollinger Bands with positive MACD and RSI that suggest a short-term rally, but it is tough to predict how long it will continue. However, for a more detailed analysis, you can read our Polygon price prediction.
Even on the weekly chart, MATIC price holds the support of $0.7 around the baseline of the Bollinger Bands but has been forming higher highs suggesting it will cross $1.5. Though RSI is around 50, it is tough to predict the resistance for the long term.
If you are interested in investing in MATIC, please maintain a stop loss of around the support level. If Polygon breaks the support, it will be long-term bearish. However, the positive sign is that MATIC’s price quickly bounced back from the low it touched after the declaration of the FTX liquidity crisis in the first week of November. It suggests a strong backup from the MATIC community and the strong belief of the investors.
2023 will be a volatile year, so MATIC price will move in both directions, so keep your crypto portfolio under regular observation and book the profit at the right time to avoid such volatility in the market.