Polygon: As MATIC prices dwindle, should you buy the dip

• Despite Polygon’s success, MATIC lagged amidst the crypto uptrend.
• Polygon’s shift to ZK-tech could reshape MATIC’s future, boosting sentiment.

Despite the widespread success of the Polygon [MATIC] network in several areas over the past few months, its native token did not experience the same level of growth

Staying behind

Crypto has seen a rise of around 100% since the onset of 2023, with MATIC standing out as a notable exception to this positive trend. MATIC has lagged behind its counterparts as focus has shifted elsewhere.

Currently, it trails in circulating market cap behind Polkadot, Tron, Avalanche, and Cardano. This could negatively impact investor sentiment, as assets with stronger growth potential are often favored.

Additionally, in terms of fully diluted valuation (FDV), it fell behind Optimism and Arbitrum.

For context, FDV refers to the theoretical maximum valuation of a cryptocurrency or token if all of its available tokens were in circulation. It takes into account the total supply of tokens, including those that may be held by the project team, investors, or reserved for future releases.

A lower FDV suggests that the perceived potential of MATIC, considering its total token supply, is not as high as some competitors.

The underperformance places MATIC at a competitive disadvantage in a rapidly evolving cryptocurrency landscape, potentially impacting its market position going forward.

Crypto is up ~100% since the start of 2023

A notable exception to the uptrend has been MATIC

But fortunes change and something is brewing at Polygon… 🧵 pic.twitter.com/y1XFNnqpMn

— Osgur Mok (@0xomok) February 8, 2024

However, things could change for MATIC going forward. Polygon has fully embraced ZK-tech and is recognized for its exceptional ZK teams. The transition involves Polygon becoming a ZK-powered chain aggregation layer. This could improve sentiment around MATIC and Polygon.

State of MATIC

At press time, MATIC was trading at $0.845009 and its price had grown by 1.36% in the last 24 hours.

Its network growth had shot up as well during this period. This suggested that new users were showing interest in the MATIC token. Due to this, the MVRV ratio of MATIC also grew, implying that most holders had gained profitability.

Is your portfolio green? Check the MATIC Profit Calculator

These profitable addresses could be incentivized to sell their holdings in the future, which could cause a problem for MATIC going forward.

Source:Santiment

In terms of the protocol’s performance, Polygon did relatively well, as active addresses on the network continued to soar.

🟪🟪🟪

What a milestone for @0xPolygon‘s PoS! 🚀

According to @artemis__xyz data, daily active addresses on @0xPolygon have skyrocketed to an all-time high of 657K! 📈

Keep an eye on #Polygon, this is just the beginning! 💜 pic.twitter.com/mTxATpjoj0

— 🪁 Keom Chads | Formerly 0VIX Chads (@KEOM_chads) February 7, 2024