Crypto analyis of today: MATIC of Polygon is on the rise, while ATOM of Cosmos is holding up.
Summary
Crypto analysis of Polygon (MATIC) and Cosmos (ATOM)
The crypto markets have been losing over the past week after a boom in January, but not all cryptocurrencies are suffering losses.
The performance of Polygon (MATIC)
Polygon‘s token, MATIC, is one of the few top crypto assets rising in value today.
It is now firmly in the top 10 of the cryptocurrencies with the highest market capitalization, so much so that it is undermining Dogecoin’s ninth place and perhaps even Cardano’s eighth.
The fact is that Polygon is by far the most widely used layer 2 of Ethereum because it enables fast and, more importantly, cheaper transactions. This continued use means that there is always some market demand for MATIC tokens.
What stands out most is that the rise in Polygon’s price that began on 8 January has not yet stopped, whereas for example that of Bitcoin and Ethereum for now seems to have stopped at the beginning of February, which was about a week ago.
Not only does MATIC’s price today mark another +3%, but compared to its late December values, the cumulative gain is now 76%.
However it was the 2022 trend that was somewhat different from the overall trend of the crypto markets, so much so that the current price is only 54% lower than the all-time high of December 2021.
Indeed, by now it has recovered not only November’s losses, but also those of May and June, as the current price of about $1.3 is in line with that of mid-April last year.
In other words, Polygon’s volatility has reduced quite a bit in the very last few years, after being particularly pronounced in the early days.
Indeed, MATIC debuted in the crypto markets in April 2019 with a very low price of just over 5 thousandths of a dollar.
Until December 2020, which was before the latest big bull run began, it was still at $0.02, but since then it has boomed, reaching first $2.5 and then even $2.9 in December 2021.
Basically in twelve months its market value increased by 14,500%, without subsequently collapsing more.
The annual low price in 2022 was less than $0.40, or about twice that of December 2020. But after this sharp drop, starting in July it began to rise again, so much so that by August it had already recovered all the losses accumulated following the implosion of the Terra/Luna ecosystem, rising to $1.
Indeed, with the November collapse due to the FTX bankruptcy, MATIC’s price fell only to $0.80, which was double the annual low of a few months earlier. It then fell below $0.80 in December, but by 4 January it had already recovered this figure, and now exceeds $1.3.
The current price thus turns out to be 500% higher than the pre-bubble price.
It is worth noting that Polygon is also increasingly used for NFTs because of the low cost of minting. For example on the world’s largest NFT marketplace, OpenSea, the monthly trading volume of NFTs on Polygon has even surpassed that on Ethereum.
The boom began in October 2022, when they went from $72 million to $149 million in a single year, or more than doubling. November was a difficult month, but by December everything was back to normal. So much so that in the first nine days of February alone it jumped to 248 million. That’s not an all-time record, but it pales in comparison to the $122 million on Ethereum. Even though in January the trading volumes of Ethereum NFTs on OpenSea had exceeded $446 million.
Seeing as February is precisely the month of the NFT boom on Polygon, it is not surprising that MATIC is continuing to grow even though the crypto market trend on the short term is overall downward.
The trend of Cosmos (ATOM)
A different matter is the case of ATOM, which is the native cryptocurrency of Cosmos.
Similar to Bitcoin and Ethereum, its price has been sideways for about a week now, but unlike the two major cryptocurrencies, it is not going down today.
It is worth noting that ATOM’s price rise did not start in January, but already in the second part of December, although it has accelerated sharply especially since the first days of January.
For now it is at +72% since 17 December, with a current price of about $14.8, which, however, is still 66% below the all-time high of January 2022.
The trend with which ATOM’s price moves differs somewhat from the trend with which BTC and ETH move, although it resembles it.
settlement of ATOM
ATOM debuted in the crypto markets in February 2019 with a price just over $2.7, and by December 2020 it had risen to $5.
However, during the bull run of 2021 it made as many as four peaks, as opposed to the classic two of the major cryptocurrencies. Moreover, the fourth of these, the biggest one, was not in November 2021, but in January 2022.
After surpassing $44, its price began to collapse, until it hit the 2022 annual low in June at $6.1. In other words, first it rallied +780%, and then -86%. Even so, the 2022 low was still just above the average price in December 2020.
Like MATIC, even ATOM by August 2022 had recovered all the losses of May and June. Later resumed its decline, though this second descent stopped just below $9.
In September last year, the team behind the development of Cosmos, Interchain Foundation, unveiled a new whitepaper for Cosmos ATOM 2.0 . Which proposed significant changes to the design of Cosmos, including an update to the tokenomics.
This proposal was later rejected by the community. It set in motion a process of advancement and change that seems to be doing the project good. In particular, they are working on Interchain Security to bring more value to ATOM’s stakers, and this is probably increasing demand for it.
The crypto market, besides of Polygon (MATIC) and Cosmos (ATOM)
According to Bitget Managing Director Gracy Chen, the crypto market was greatly affected by the events of the past year, and is just beginning to show slight signs of recovery. However, the effects of those catastrophic events are still being felt, damaging people’s perception of this market.
Chen stated:
“The onus is on exchanges and platforms to reestablish trust and act upon recent lessons learned. In addition to establishing safeguards such as customer protection funds, it is also time for exchanges to commit to transparency, with proof of reserves – a recurring auditing process that certifies the holdings of an exchange – likely to increasingly catch on.
With more scrutiny than ever before, we will likely see a consolidation of trading ecosystems with just a handful of the strongest competitive platforms emerging. Only exchanges having a strong balance sheet and solid risk management practices will cement their market share. Trust, security and transparency will be the crucial market differentiators in 2023 and beyond.”
