How Polygon zkEVM growth could act as a catalyst for MATIC price

Polygon’s zkEVM supports over $5 million in assets across 20 cryptocurrencies.
The ecosystem made massive strides, and $2.1 million worth of assets are locked in decentralized exchanges and collateralized lending.
MATIC price could begin its recovery from the recent decline in its price with the growth of zkEVM acting as a catalyst.

Ekta Mourya FXStreet

Polygon network’s zkEVM rollout has witnessed an increase in Total Value Locked. There is a spike in on-chain activity on the MATIC network, and experts expect this to fuel a recovery in the asset’s price.

Also read: Ethereum battles intense selling pressure from spike in ETH deposits to crypto exchanges

Polygon zkEVM could catalyze MATIC recovery

Based on data shared by Polygon in a recent tweet, there are over $5 million in assets on the network. zkEVM currently supports nearly 20 tokens, and the bulk of the assets is in Ethereum and USD Coin. $2.1 million worth of assets is locked across decentralized exchanges and collateralized lending.

The TVL of zkEVM has recorded consistent growth, hitting $2.25 million since April 3, 2023, as seen in the chart below:

TVL in Polygon’s zkEVM

Interestingly, there is a spike in on-chain activity; the unique wallets and daily active addresses count on Polygon zkEVM continue its upward trend.

Polygon zkEVM unique addresses chart

The rapid climb in on-chain activity in zkEVM could likely be a bullish catalyst for the blockchain’s native token MATIC.

MATIC price could recover from its 12% pullback in April

MATIC, the native token of Ethereum’s scaling solution, yielded double-digit losses for holders over the past thirty days. With the emergence of bullish catalysts in Polygon’s ecosystem, the Layer 2 scaling token could begin its recovery.

MATIC price is currently in an uptrend that started in mid-June 2022. MATIC price is currently below the three long-term Exponential Moving Averages 10, 50 and 200-day. Key resistances at $1.18, and $1.39, previously supported the token in its 2022 price rally.

MATIC/USD 1D price chart

If the MATIC price declines below the 23.6% Fibonacci level at $0.93, the bullish thesis could be invalidated. The immediate support for MATIC is $0.86.

Author

Ekta Mourya

FXStreet

Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.

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