- Polygon price has crashed hard in the past few days.
- The network is facing substantial competition from the likes of Arbitrum and Optimism.
Polygon’s MATIC price plunged to the lowest level since February 1 as the fallout of Silvergate Capital continued. It retreated to a low of $1.13, which was about 28% below the highest level this year as competition in the sector rose.
Polygon is facing strong competition
Polygon is the biggest and most successful layer-2 networks in the blockchain industry. It has been embraced by some of the biggest companies in the world, including Disney and Meta Platforms.
According to DeFi Llama, Polygon has more than 370 dApps that have a total value locked (TVL) of over $1.1 billion. It is also used widely in other fields of the blockchain industry like non-fungible tokens (NFT) and the metaverse.
One of the latest Polygon news was the launch of its zero-knowledge (zk) blockchain which is significantly faster and cheap to operate. Analysts believe that zero-knowledge technology is the most efficient approach of building sidechains.
The biggest risk for Polygon and MATIC prices is that the layer-2 industry is getting substantially crowded. For example, Arbitrum, a major layer-2 network with no token, has seen its total value locked jump to over $1.9 billion, making it bigger than Polygon.
Read more: How to buy Polygon.
The other big competitor in the industry is Optimism, a leading platform that has a TVL of over $1 billion. Optimism recently partnered with Coinbase to help it launch its own blockchain known as Mantle.
The most recent entry into the industry is Consensys, the parent company of MetaMask, Codefi, Diligence, and Quorum. In a statement, the company said that it will launch a zkEVM platform that will have the capacity to handle thousands of transactions per second (TPS). It has already handled over 480k transactions in its testnet. In a statement, the co-founder of Hop Protocol said:
“The ConsenSys zkEVM team engaged with the Hop community to make the integration happen in a quick and professional way. The ease of integration, tooling, compatibility, and responsiveness from the ConsenSys team allowed this integration to work seamlessly with the existing Hop development stack.”
MATIC price prediction
The daily chart shows that the Polygon price has been in a strong bearish trend in the past few days. Most of these losses came after the implosion of Silvergate Capital. It has already moved below the important support level at $1.305, the highest level on November 6.
The coin has also retreated below all moving averages while the Relative Strength Index (RSI) has pulled back. Therefore, the MATIC price will likely continue falling as sellers target the next key support at $1.
