Recently, an increasing number of people have been interested in Polygon (MATIC), Ethereum’s response to scaling. Its daily active addresses have reached a new record high of over 1.4 million, which shows that the network is getting more and more users. But this sudden increase in action gives us a more complex picture of MATIC’s future.
It is clear that Polygon’s platform is extremely occupied, but a closer look shows that there might be an issue. Even though the number of users is growing, transaction fees have dropped, which makes people fear about the network’s long-term ability to generate funds.
Also, the Total Value Locked (TVL) in Polygon’s Decentralized Finance (DeFi) protocols has gone down, which shows that DeFi investors are being careful with their funds right now because of the way the market is.
Even so, people who support MATIC still feel optimistic. In the last 24 hours, the token’s value has gone up by over 8%, hitting about $0.71. This is likely due to more people wanting to buy it.
There is less MATIC available on exchanges, and wealthy individuals are holding more, which shows that they are optimistic about Polygon’s future.
MATIC’s Technical Outlook
Additionally, technical signs are positive for MATIC. The Chaikin Money Flow (CMF), the Money Flow Index (MFI), and the Moving Average Convergence Divergence (MACD) all point to a possible upward trend.
But the Bollinger Bands, which measure how volatile prices are, point to a time when prices might not change as much, which adds some doubt.
Polygon is at a turning point, and its high levels of activity are paired with worries about falling fees and DeFi TVL. MATIC investors have reason to be optimistic because of the recent price rise and bullish technical signs, but they need to be careful because the cryptocurrency market is very unstable.
To keep going, Polygon needs to deal with the problem of fees going down by looking into other ways to generate funds or setting up fee systems that encourage people to use the network. Also, making the DeFi ecosystem more active by attracting new protocols and users could boost investor trust and help TVL grow.
