The Polygon price has continued its blistering move higher, boosted by Ethereum’s network congestion.
Polygon (MATIC) aims to solve the Ethereum network’s scaling issues by providing a lightweight, second layer adjacent to the Blockchain. The market is betting that Polygon will be a primary beneficiary as the rise of DeFi could make Ethereum a victim of its own success.
Polygon, previously known as Matic (Hence the ticker), has seen a considerable increase in investor demand over the recent trading sessions, sending the price to an all-time high and more than doubling its valuation.
Speaking to Coindesk, founder and COO, Sandeep Nailwaz, explained the problems facing the Ethereum network;
‘Do you think if Ethereum is going to become the fundamental settlement layer of the world that even 3,200 tps is a good enough scalability?‘
No, absolutely not. Let’s think of it as the supply of scalability. At the moment it goes up on Ethereum, the demand is already there. It will grow immediately and you will end up with the same bottlenecks.’
It’s clear from the price action; the market sees Polygon as a viable solution to Ethereum’s scaling issues.
Polygon price prediction
Looking at the 4-hour chart, we see that a break above the descending trend line at $0.444 (in place from the 12th of March high at $0.543) triggered the recent parabolic move higher. In the period that followed, only 4 out of the last 25 candles have registered a decline.
The recent rate of ascent has pushed the Polygon price deep into overbought conditions, with the Relative Strength Index (RSI) registering a lofty reading of 75.61.
After posting an impressive +2700% rally since the February lows of $0.033, it may prove dangerous chasing this move higher in the short term. With the risk of a sharp pullback growing, investors may want to see a normalization of trading conditions before jumping on board.
A break below the recent, steep ascending channel at $0.848 may trigger lower prices. Alternatively, a continuation of the move cannot be discounted, with a break above the recent high of $0.9479 putting Polygon on the path to an even higher valuation.