Polygon [MATIC]: Will DeFi achievements be enough to save the token from bears? 

• MATIC’s fees and revenue increased over the last few weeks. 
• The token’s price declined by over 2% in the last 24 hours, and the downtrend might continue. 

Polygon [MATIC] has noted a surge in a key metric of late that indicates increased usage of the network. Artemis pointed out that gas usage in Polygon spiked over the last week. 

⛽ Gas usage on $MATIC just spiked in the last week.

We dug deeper with the Blockchain Activity Monitor.

Here’s what we found.🧵 pic.twitter.com/YyHlBIwJNo

— Artemis 🏹 (@Artemis__xyz) May 1, 2023

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

Thanks to the increased gas usage, the network was also able to generate more fees and revenue, as evident from Token Terminal’s data. 

Source: Token Terminal

A closer look at Polygon’s DeFi space

Upon further investigation, Artemis found out that most gas usage was coming from DeFi applications. As per the chart, XEN was the main player that catered to the increase in Polygon’s gas usage, followed by others like Matcha, Aave [AAVE], Balancer [BAL], etc.

However, though gas usage from DeFi applications increased, it was not reflected in the network’s value. As per Artemis, Polygon’s TVL has gained declining momentum since 19 April and at press time stood at just over $1 billion.

Dune’s data revealed yet another concerning metric. A similar declining trend was also noted in the number of transactions on Polygon’s DeFi ecosystem. 

Source: Dune

This can be helpful

Polygon had another interesting update, which could help increase transactions over the coming days. Phantom, a crypto wallet built for DeFi and NFT, announced its launch on multiple chains, including Polygon.

🚨 @phantom multichain is rolling out today!

What does it mean?
• Use One Wallet For Everything
• Do More With Your NFTs
• Protect Yourself From Scams
• Understand Your Transactions

Read more 👇🏽 https://t.co/VAORRBrwwT

— Polygon DeFi | zkEVM Mainnet Beta (@0xPolygonDeFi) May 1, 2023

The launch will allow users to access Polygon NFTs and also connect to dApps automatically. Apart from this, the wallet also provides multiple features, such as transaction previews, automated blocklists, etc.

MATIC continues to suffer

MATIC’s suffering does not seem to end anytime soon, as its price again fell victim to a correction. According to CoinMarketCap, MATIC’s price declined by over 2% in the last 24 hours. At press time, it was trading at $0.9586 with a market capitalization of over $8.8 billion.

A look at MATIC’s on-chain metrics gave an idea of what went wrong. CryptoQuant’s data revealed that MATIC’s exchange reserve was increasing, suggesting higher selling pressure.

MATIC’s supply on exchanges shot up on 1 May, which also indicated that investors were selling the asset. The token’s demand in the futures market fell, as evident from its Binance funding rate. 

Source: Santiment

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What to expect from Polygon

MATIC investors can expect more days of price drops as the market indicators remain in the bears’ favor. For example, the Exponential Moving Average (EMA) Ribbon displayed that the bears were leading the market, as the 55-day EMA was well above the 20-day EMA.

MATIC’s Chaikin Money Flow (CMF) registered a downtick, which was a development in the sellers’ favor. Additionally, the Money Flow Index (MFI) was also moving downward, further increasing the chances of a continued downtrend.

Source: TradingView