MATIC, Up 30% In 7 Days, Shows Potential For More Upside; ZK Day Among Drivers

Polygon continues its bullish rally after touching a new monthly high at $2.5 Tuesday. This rally can be attributed to the rise of Bitcoin above $50,000 as the market tried to cover the massive sell-off in the crypto market last Saturday, when MATIC dropped from $2.3 to a monthly low of $1.5.

The daily candle for Tuesday opened at $2.27 and touched a high of $2.5, which was also the MATIC token's monthly high. The candle closed at $2.34.

Data from CoinMarketCap shows that Polygon, as of 11:13 p.m. ET, was down 1.24%, which seems to be a correction from the massive gain earlier in the day. Interestingly, data from CoinGecko shows that the token rose by nearly 30% in the last seven days. MATIC touched ATH on May 18, rallying to $2.68.

MATIC was trading at $2.27 at the time of writing, with a market cap of nearly $15.8 billion, positioning the token at the 14th spot in the market. Popular analyst Lark Davis claims that MATIC has massive untapped potential and deserves to be in the top 10.

Reasons for gain

MATIC's current rally has many drivers. First, like its rival Solana, Polygon is highly scalable, meaning that it can initiate and end blockchain-based transactions rapidly when compared to Bitcoin or Ethereum.

Another is the lower transaction cost. As per data from Polygon Gas Tracker, at the time of writing, the standard fee for Polygon now is 33 gwei (where one gwei equals 0.000000001 ETH), i.e., $0.000132 while ETH's gas fee is around $6.

The price is also being driven higher by the anticipation for an "exciting announcement" scheduled for Thursday at the Polygon virtual "zk day." This event will be centered around zk-STARKs and zero-knowledge (ZK) proofs, a type of cryptography used to verify a given statement without revealing the underlying data using which the verification is done. This innovation is expected to attract new projects for the network.

Wallet analysis

Wallet analysis shows two major transactions on Polygon in the last 24 hours. First, 2,018,700 MATIC ($4,572,498) were transferred from an unknown wallet to FTX exchange, indicating that profit-booking could be the motive.

At the same time, someone purchased $2,314,215.34 worth of $MATIC, indicating whales are still accumulating the token.

Below is the overview of ownership of the MATIC circulating supply, which shows that nearly 61.9% of the supply is held via smart contracts that run on the network.

Polygon (MATIC) price analysis

MATIC price analysis shows that the token is trending upward even as a majority of altcoins and even Bitcoin are seeing a downward trend. As seen in the figure below, the token has continued to touch new high. The resistance trendline below shows that bullish momentum still prevails.

In the chart below, the RSI indicator shows a surge in buying pressure, but the MATIC token hasn't entered the oversold levels. The gradient of the line is negative, which indicates that more correction will follow. The token is still bullish but in a correction phase.

The MACD indicator shows that investors witnessed a bullish divergence on the daily chart (below) a few days ago. The MACD line (blue) crossed above the signal line (orange), and as a result, the histogram also turned green. Overall, buyers are still in control of price movements.

Finally, the 50-day and 100-day Moving Averages (MA) continue below the price action while acting as important support levels. Last Saturday, after the sell-off, MATIC fell below the 5-day MA but the 100-day MA was held as support. Traders can expect similar momentum Wednesday as well. Importantly, the price action has broken out from the upper end of the Bollinger Bands multiple times, indicating sustained buying pressure.

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Parth Dubey holds Bitcoin (BTC), Ethereum (ETH), Solana (SOL), Cardano (ADA) and Polygon (MATIC).