Polygon (MATIC) extended its correction from the record highs. Should I invest in June?

By: Stanko Iliev
Stanko Iliev
Stanko dedicates himself to providing investors with relevant information they can use to make investment decisions. He loves the… read more.
on Jun 7, 2021
  • Faster transactions and lower fees fuel Polygon's (MATIC) adoption in the DeFi space
  • Polygon (MATIC) extended its correction from the record highs above $3.4
  • The risk of further declines is probably not over

Polygon (MATIC/USD) extended its correction from the record highs above $3.4, registered on 18rd May, and the price of this cryptocurrency can weaken even more in the upcoming days. The current price stands around $1.54, and if you decide to trade this cryptocurrency, you should always use a “stop-loss” order because the risk remains high.

Fundamental analysis: Faster transactions and lower fees fuel Polygon’s (MATIC) adoption in the DeFi space

Polygon is a platform for Ethereum scaling and infrastructure development with a mission to improve the accessibility of the decentralized finance (DeFi) space to more users. Faster transactions and lower fees fuel Polygon’s (MATIC) adoption in the DeFi space, and it is important to mention that several popular DeFi projects have already migrated to Polygon (Aave, Curve, and DEX).

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Polygon solves issues with slow block confirmations, and this platform has experienced tremendous growth in its user activity in the last two months. This project helps you to scale your DApps massively, and you can even use your own tokens as settlement fees to run the network.

“Throughout 2021, Ethereum fees skyrocketed up to 845% compared to the year before; currently, a transaction on the network costs around $4.819. On the other hand, transacting on the Polygon network only costs around $0.001 to transfer $200,” IntoTheBlock reported.

Polygon (MATIC) price has skyrocketed since the beginning of May 2021 and reached a record high above $3.4 on 18rd May. Since then, the price has collapsed, daily trading volume has weakened, and the risk of further declines is probably not over.

The cryptocurrency market remains under pressure, and the concerns among traders are that it may take a long time for prices to see any recovery. If bigger investors unexpectedly sell a substantial amount of Polygon (MATIC), it could result in an extreme correction as a small price change could provoke liquidations from traders with high leverage.

Technical analysis: The risk of further declines is probably not over

Data source: tradingview.com

Polygon (MATIC) could weaken even more in the ongoing bear market, and if the price falls below $1.40, the next price target could be around $1.20 or even below. On the other side, if the price jumps above $1.80, it would be a strong “buy” signal, and we have the open way to the $2 resistance level.

Summary

Faster transactions and lower fees fuel Polygon’s (MATIC) adoption in the DeFi space, and it is important to say that Polygon has tremendous growth in its user activity in the last two months. Polygon (MATIC) extended its correction from the record highs above $3.4, registered on 18rd May, and the price of this cryptocurrency can weaken even more in the upcoming days.

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