Will MATIC benefit from zkEVMs’ hype?

• Interest in Polygon’s zkEVM, StarkNet, and zkSync Era surged.
• MATIC fluctuated as declining network growth and trading volume raised concerns.

The zkEVM sector saw intensified competition as interest in StarkNet, zkSync Era, and Polygon’s [MATIC] zkEVM continued to surge. On 18 June, Twitter account Emperor Osmo noted that there was an increase in these protocols’ daily active addresses and Total Value Locked (TVL).

Read Polygon’s [MATIC] Price Prediction 2023-24

zkEVM sector grows

The rising interest in these zkEVM solutions can partly be attributed to the anticipation of token AirDrops. At present, zkSync Era and StarkNet don’t have native tokens. This has led many to believe that a token drop is in the works.

It is important to consider that once the AirDrop occurs, the hype may fade away, leading some users to leave these protocols.

However, activity on the Polygon zkEVM has not been driven by the anticipation of AirDrops. Therefore, the network’s activity could remain sustained in the long run.

Another contributing factor to the growing interest in these zkEVM solutions was Ethereum’s [ETH] upcoming Cancun upgrade. Danksharding, a key component of Cancun, introduces data blobs that allow rollups to send information at reduced costs.

By leveraging this feature, rollups can offer more affordable transactions, saving users from high fees associated with data storage and processing. This enhancement improves the overall scalability and cost-effectiveness of the zkEVM ecosystem.

No good news for MATIC holders

While Polygon holds a favorable position in the zkEVM space, there is still room for growth for its native token. MATIC experienced a significant price drop of 40% between 5 – 10 June. Since then, the token’s price has fluctuated between $0.677 and $0.505, with the press time value at $0.598.

Examining the Relative Strength Index (RSI) revealed a value of 42.50, indicating a slight advantage for buyers in terms of momentum.  Additionally, the Chaikin Money Flow (CMF) sat at 0.04, signifying positive cash flow into the MATIC market.

The CMF is a technical indicator that measures the volume of money flowing into or out of an asset. A positive CMF suggests buying pressure and increased accumulation of the asset.

Source: Trading View

How much are 1,10,100 MATICs worth today?

The sharp decline in MATIC’s price may be attributed to a decrease in network growth, suggesting waning interest from new addresses. Moreover, the declining trading volume on Polygon raised concerns for MATIC holders expecting a rebound in value.

Market participants closely monitor network growth and trading volume as key indicators of market health and investor confidence.

Source: Santiment