The Polygon price had a strong performance in 2021. MATIC, its native token, rose by more than 7,000% in 2021, bringing its total market capitalization to more than $17.15 billion. It is now the 14th biggest cryptocurrency in the world.
Why MATIC jumped
Polygon is a leading blockchain project that helps developers optimize their applications. It is a layer-2 platform that was built purposely for Ethereum’s network.
For starters, Ethereum is a leading platform that has consistently remained as the second-biggest smart contract platform in the world after Bitcoin.
Developers use Ethereum to build all types of applications including on non-fungible tokens (NFT), metaverse, and decentralized finance (DeFi).
While Ethereum is a good platform, it is known for its slow speed and high transaction costs. Therefore, layer 2 platforms like Polygon help developers to optimize their applications while having the advantage of being in Ethereum.
In 2021, the number of Polygon projects jumped sharply. This trend was motivated by the fact that large developers like Aave and Curve Finance developed projects for the network. The most recent addition was Uniswap, one of the leading DEXes in the world. Other popular projects built on Polygon are Balancer, SushiSwap, and QuickSwap.
Looking ahead, in 2022, the Polygon price will likely keep rising as more developers continue to move their apps to the network. However, the success of the Ethereum 2.0 transition could have an impact on this transition. If the upgrade will lead to more speeds, developers could lack the motivation to move to Polygon.
The other catalyst for the MATIC price will be the Federal Reserve. The bank has hinted that it will start hiking interest rates this year. Therefore, there is a likelihood that this hawkish tone will have an impact on Polygon and other coins.
Polygon price prediction
The daily chart shows that the Polygon price has been in a tight range recently. This price is slightly below the important resistance at $2.68, which was the highest level on May 18th. It has also moved slightly above the 25-day and 50-day moving averages while the price is slightly above the ascending trendline shown in red.
Therefore, the coin’s price will likely keep rising in January as bulls target the key resistance at $3.5. This view will be invalidated if the price falls below $2.30.
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