Published 1 day ago on
By Michael Jermaine Cards
The price of Polygon (MATIC) has rallied sharply in recent weeks as the Ethereum blockchain upgrade to proof-of-stake draws ever closer.
The MATIC price rose to a high of $0.8890, about 180% above its low in July of this year.
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What will happen to Polygon after the Merge?
Polygon is the largest Layer 2 platform in the blockchain industry. It competes with other popular scaling projects like Optimism and Loopring.
Layer 2 blockchains are relatively easy to work with, as they help scale and accelerate the performance of other blockchains. Most projects of this type focus on working with the Ethereum blockchain, as it is the largest smart contract platform in the world.
As a result, there have been concerns about what will happen to Polygon and other scaling projects like Immutable X after the Ethereum Merge.
The Merge is the name for a major upgrade after which the way Ethereum works will change. So far, it is a proof-of-work (PoW) blockchain. This means that validation of transactions is done using mining, which also involves mining new Ether coins. After the merger with the so-called Beacon Chain, it will instead be a Proof-of-Stake (PoS) blockchain. This transition is expected to make Ethereum more energy efficient and secure. It will also lay the groundwork for other upgrades like sharding, which will make transactions within the ETH blockchain much faster.
As a result, many Polygon investors are concerned about whether there will even be a need for Layer 2 networks after this upgrade. Moreover, Ethereum transactions are supposed to become much faster and cheaper, which is an important advantage of Polygon’s projects.SEE ALSO How hiring remote workers can save you space and money
In reality, however, this view is wrong. For one, the merge is a change to the consensus algorithm and not an expansion of network capacity. Alone as a result of the upgrade, gas rates are not downgraded and speeds are not increased. Therefore, it is likely that Polygon will have demand even after the Ethereum merger.
Polygon MATIC’s share price has recently rallied due to its ongoing partnerships. For example, Fireblocks and Tokeny Drive have announced that they will partner with Polygon to provide turnkey solutions for enterprises to use in tokenization. Other companies that have recently partnered with Polygon include New Canvas, Robinhood and GameSwifts.
MATIC Price Forecast
The daily chart shows that the MATIC price has been in a strong uptrend in recent weeks. The coin has moved slightly below the Fibonacci retracement level of 23.6%. In addition, the price line has formed an inverted head and shoulders pattern.
The current polygon price is also above the 25 and 50 day moving average lines. The MACD has also moved slightly above the neutral point. Therefore, the price will likely continue to rise as the bulls target the next key resistance at $1.50, which is about 70% above the current level.
(Featured image by Satheesh Sankaran CC BY-ND 2.0 via Flickr)
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RELATED TOPICS:ETHEREUM MERGEFEATUREDLAYER 2 PLATFORMMATIC PRICEPOLYGON
Michael Jermaine Cards
Michael Jermaine Cards is a business executive and a financial journalist, with a focus on IT, innovation and transportation, as well as crypto and AI. He writes about robotics, automation, deep learning, multimodal transit, among others. He updates his readers on the latest market developments, tech and CBD stocks, and even the commodities industry. He does management consulting parallel to his writing, and has been based in Singapore for the past 15 years.