Crypto Market Review: Markets are finally coming back thanks to hype in numerous areas of industry
The market is experiencing a sharp recovery as assets tied to L2s, hyped L1s and those that have exposure to Chinese investors are rallying massively, bringing a second wind to the cryptocurrency market recovery that began in January.
Polygon’s explosive performance
Polygon’s MATIC token has seen a 25% rise in value, and the rally has accelerated in recent days due to the hype surrounding Layer 2 (L2) networks, which Polygon is actively developing. MATIC has been one of the strongest performers in the market in the last few months, despite the dominance of bears.
The rise of L2 networks has become a significant topic in the cryptocurrency industry as the popularity of NFTs and DeFi continues to grow, leading to congestion and high transaction fees on the Ethereum network. As a result, users are turning to L2 solutions.
MATIC’s price has surged from its low of $0.19 in December to its current price of around $0.52, with some predicting that the token will reach the $1.00 threshold in the foreseeable future if the same growth pace remains. The rise of MATIC can be attributed to a variety of factors, including the network’s scalability, low transaction fees and growing adoption in the NFT and DeFi spaces.
In addition to its L2 solutions, Polygon has also been expanding its partnerships and use cases. The network has recently partnered with sports and entertainment blockchain platform Chiliz to bring blockchain-based fan tokens to its platform. The partnership will allow Chiliz to launch its fan tokens on Polygon, which offers faster transaction speeds and lower fees than the Ethereum network.
Solana’s unexpected breakthrough
Cryptocurrency Solana is making a breakthrough on the market, despite facing a massive $30 million liquidation volume. This may seem like a negative indicator of Solana’s potential growth, but the fact that Solana continues to rise in value is impressive. Even more so, the token has been showing a volatile performance, which could be a sign of further growth to come.
The most plausible reason behind Solana’s rise could be attributed to the increased demand for NFTs and DeFi solutions. With the boom of the NFT market and the growth of decentralized finance, Solana has positioned itself as a strong contender in the space a long time ago.
With the further growth of popularity of NFTs and the overall rise of risk tolerance on the market, Solana and similar cryptocurrencies might see an increase in inflows, and hence see a surge of the price level on the market.
Ethereum delivers important signals
Ethereum has recently painted an important technical signal on its daily chart, the golden cross. This occurs when the short-term moving average — in this case, the 50-day moving average — crosses over the long-term moving average, in this case, the 200-day moving average.
However, despite this promising technical indicator, Ethereum has not been immune to the recent market downturn. The Relative Strength Index (RSI) indicator, which measures the strength and momentum of price movements, has been descending on Ether. This is concerning for many traders, as it could be a sign of a fading rally and a potential reversal in the foreseeable future.
Ethereum’s recent performance has been somewhat mixed, with the cryptocurrency experiencing both significant gains and losses over the past few weeks. While the recent market downturn has had an impact on Ether, the cryptocurrency has still managed to hold up relatively well compared to many other assets on the market.