DeFi
Analysis of Polygon’s DeFi performance after MATIC’s 7% price drop
- MATIC price fell more than 7% in the last 24 hours
- The measurements suggest a further drop in its price soon
MATIC has significantly disappointed its investors with its price action of late. However, as the bears took control of the altcoin’s price on the charts, Polygon’s performance in the DeFi space looked commendable. Hence the question: can the latter contribute to initiating a reversal of trend for MATIC?
Polygon’s recent setback
CoinMarketCap data revealed that the price of MATIC has depreciated by more than 5% over the past seven days. However, the situation quickly got worse as the altcoin lost another 7% of its value in the last 24 hours alone. At the time of writing, MATIC was trading at $0.6622 with a market cap of over $6.5 billion, making it the 18th largest crypto.
The price drop also impacted the social metrics of the token. For example, its social volume dropped, reflecting a decline in its popularity. Its weighted sentiment also remained in the negative zone – a sign that bearish sentiment retained its dominance in the market.
Source: Santiment
The worst news was that even though the price of the token was falling, its trading volume was increasing. This legitimized the price decline and indicated that the chances of the trend continuing were high.
In addition to this, AMBCrypto’s examination of Coinglass data revealed that the altcoin’s long/short ratio has fallen over the past 4 hours. A low ratio is a sign of bearish sentiment, characterized by increased interest in selling or shorting assets.
Source: Coinglass
And the good part is…
As the price of the token fell, Polygon shared a Tweeter highlighting blockchain performance in the DeFi space. According to the same, Polygon PoS, zkEVM and CDK have become the best choices for DeFi builders, providing developers with scalable networks and tools to create financial solutions.
Aave was the largest DeFi protocol on Polygon in terms of total value locked, with a value of $460 million. The Azuro protocol has been introduced into EVM chains supporting prediction application ecosystems. In just 14 months on Polygon, Azuro now has over 25 live apps, $300 million in volume, and over $3.2 million in revenue.
And yet, despite such strong pillars in the DeFi space, Polygon’s network activity plummeted last week.
Realistic or not, here it is Market capitalization of MATIC in terms of ETH
Finally, AMBCrypto’s analysis of Artemis data revealed that MATIC’s daily active addresses also fell. Thanks to this, daily blockchain transactions have dropped over the past 7 days.
Source: Artemis
This means that while Polygon’s DeFi performance has been commendable, if not perfect, it is still not enough to guide MATIC’s value into bullish territory on its own. Therefore, the altcoin market trend is expected to persist for the time being.