Polygon price has dropped for four consecutive days as the crypto sell-off intensified. MATIC token slipped to the key support level at $0.4790 on Friday, its lowest point since July 8th. It has dropped by over 62% from its highest point this year, making it one of the worst-performing big crypto.
Polygon ecosystem challenges
Over the years, Polygon tokens have sold off as competition in the layer-2 and layer-1 industries has intensified. While Polygon pioneered the L2 industry, it has now been passed by other popular cryptocurrency projects like Arbitrum, Base, and Blast.
A key issue for Polygon is that it lacks big internal apps. Its biggest ecosystem dApps are Aave, Uniswap, Quickswap, and Compound, also available in other chains. This is unlike Solana, which boasts of its dApps like Solend, Raydium, and Jupiter. Data shows that Polygon ranks tenth in DEX volume.
Polygon has not been active in the meme coin industry, which has propelled Solana into the third-biggest chain in the industry.
Polymarket growth continues
On the positive side, there is a chance that Polygon will receive its breakthrough application, Polymarket.
Polymarket is a prediction platform that lets users wager on topics like politics, crypto prices, and celebrities. It has become a viable alternative to other global prediction platforms like PredictIt in the past few months.
According to DeFi Llama, Polymarket now has a total value locked (TVL) figure of $87 million. It has also added thousands of users worldwide, while the number of bets jumped to over 1.5 million in July.
The volume of bets in the ecosystem has also risen, with the presidential election adding over $391 million in volume.
Polymarket has room to grow over time because of its strong market share in the industry and popularity.
It is unclear whether Polymarket will benefit Polygon, especially when it launches an airdrop. Blockchains sometimes don’t benefit when their dApps become highly popular. For example, recently, Notcoin has not benefited greatly from the popularity of Hamster Kombat.
Polygon price forecast
On the daily chart, the Polygon price formed a death cross pattern on April 25th as the 200-day and 50-day moving averages crossed each other. A death cross is one of the most popular bearish signs in the market.
Polygon has continued making lower lows and lower highs. It has also remained below the 50-day and 200-day moving averages while its volume has retreated. Therefore, its outlook is bearish, with the next point to watch being at $0.4305, its lowest swing in July.
