zkEVM buzz continues to power Polygon, where is MATIC headed?

On Feb 21, 2023

The total transaction fees paid on the network quadrupled over the last 30 days
MATIC was one of the best-performing currencies in the market in 2023, having leaped 94% since the start of the year

On 21 February, Hinkal, a privacy protocol which lets users anonymize DeFi transactions, announced on Twitter that it would make Polygon [MATIC] network its home.

We are thrilled to announce that we are launching on @0xPolygon Mainnet tomorrow – Tue 21st Feb! 🚀
Once we are live, you will be able to 👇
✅ Deposit/Swap/Transfer/Withdraw your assets privately
Supported tokens: $USDC, $USDT, $DAI, $WBTC, $WETH, and $MATIC #DeFi
🧵🎁👇 pic.twitter.com/xAQAFvW12q
— Hinkal Protocol (@hinkal_protocol) February 20, 2023

With an added layer of security, Hinkal’s onboarding was a shot in the arm for Polygon’s DeFi ecosystem, which has experienced significant growth of late. Polygon’s total value locked (TVL) expanded 24% since the start of 2023 and looked on course to recover the losses made since the FTX debacle, as per data from DeFiLlama.

Source: DeFiLlama

Excitement builds up as zkEVM has a launch date

A lot of the renewed interest could be attributed to the much-anticipated Polygon’s zkEVM scaling solution, which is being touted as a game changer for both Polygon [MATIC] and Ethereum [ETH]. The layer 2 scaling solution is expected to increase network throughput significantly and reduce gas prices.

Recently, Polygon announced that it set 27 March as the launch date for the zkEVM mainnet beta.

Roses are red 🌹
Violets are blue
Poems are hard 😩
Mainnet Beta is here
ON MARCH 27, Polygon #zkEVM launches the future of Ethereum scaling
🚢💜🚢💜https://t.co/OqSOYTn8Uv pic.twitter.com/kpXavea3ff
— Polygon (@0xPolygon) February 14, 2023

The excitement was palpable as the total transaction fees paid on the network quadrupled over the last 30 days, per data from Token Terminal. Since MATIC holders take a share of the total fees paid on the network, the exponential surge drove the protocol revenue towards the skies as well.

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Source: Token Terminal

Polygon also found good allies in big addresses. According to WhaleStats, $208 million worth of MATIC was being held by top ETH whales at the time of writing.

🐳 The top 2000 #ETH whales are hodling
$681,037,066 $SHIB
$208,037,515 $MATIC
$159,138,991 $LINK
$146,873,905 $BIT
$146,616,720 $BEST
$144,111,360 $CHSB
$104,702,156 $UNI
$79,455,364 $MANA
Whale leaderboard 👇https://t.co/R19lKnPlsK pic.twitter.com/YNZ2v2D4BW
— WhaleStats (tracking crypto whales) (@WhaleStats) February 21, 2023

MATIC looked set for further gains

Despite this, Polygon’s on-chain activity left a lot to be desired. The Transaction Volume steadily declined over the past week while the rate at which new addresses adopted MATIC was uninspiring, data from Santiment revealed.

Another issue was the high 30-day MVRV Ratio, which indicated that the network was profitable for most token holders and it could cause selling pressure for the coin.

It was evident that most holders were in an accumulation mode in anticipation of the high returns that could come their way after the zkEVM launch next month.

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Source: Santiment

MATIC was one of the best-performing currencies in the market in 2023, having leaped 94% since the start of the year. Its daily chart looked bullishly positioned, with higher-highs and higher-lows.

The RSI (Relative Strength Index) rose sharply in the last few days, and was seen moving towards overbought territory. The On Balance Volume (OBV) has been on an upward trajectory since last week, indicating that buying was the flavor of the season.

Short-term bulls looking to profit could lead to a pullback, but a reversal seemed unlikely at this stage.

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Source: Trading View MATIC/USD

This article originally appeared here.