- Polygon price has been in a bearish trend recently.
- MATIC has formed a death cross on the daily chart.
- Polygon is facing competition from Arbitrum and Polygon.
Polygon MATIC price has been in a strong bearish trend in the past few weeks as competition from Optimism and Arbitrum rises. MATIC was trading at $0.871, the lowest level since January 10. In all, the coin has plunged by over 44% from the highest point this year.
Competition from Arbitrum and Optimism rises
Polygon is one of the oldest and best-known layer-2 networks in the blockchain industry. The platform aims to supercharge applications created in Ethereum, the biggest chain in the blockchain industry.
Polygon is beloved partly because of its comprehensive suite of solutions. The flagship product is the Polygon PoS, an EVM-enabled sidechain that helps reduce costs and boost transaction speeds.
Polygon has also launched Polygon zkEVM, which is a zero-knowledge rollup that is open source. Other products in its suite are Polygon Miden, Supernets, and Polygon ID.
The challenge facing Polygon is that competition from both layer 1 networks and layer 2 blockchains is rising. The biggest competition is coming from Arbitrum, which has grown to become the fourth-biggest chain in decentralized finance (DeFi).
Data compiled by DeFi Llama shows that Arbitrum has 331 DeFi dApps in the ecosystem that has a total value locked (TVL) of more than $3.78 billion. It has over 161k active users.
On the other hand, Polygon has 414 dApps in its ecosystem and more than 447k users. It has a TVL of over $1.5 billion in TVL. Optimism, which I wrote about this week in this article, has 126k users and 135 dApps.
Still, Polygon has an edge in the non-fungible token (NFT) industry. Data by CryptoSlam shows that Polygon NFT sales in the past 24 hours were $686k while Arbitrum handled $182k.
Taken together, Polygon will need to grow its ecosystem as it competes with these aggressive layer 2 networks.
Polygon price prediction
The daily chart shows that the Polygon price has been in a strong bearish trend in the past few days. Using moving averages, the coin has formed a death cross, which happens when the 200-day and 50-day exponential moving averages (EMA) cross each other.
MATIC also moved slightly below the key support at $0.95, the lowest point on March 10. It also seems like it has formed a head and shoulders and bearish flag patterns. Therefore, there is a likelihood that the coin will have a bearish breakout as sellers target the key support at $0.74, the lowest point on December 31st.
