Cryptanalyst Benjamin Cowen is analyzing the future prospects of the Ethereum (ETH) Polygon scaling solution, whose native token MATIC has been trending upward in recent months.
In a new strategy session, Cowen compares the layer 2 protocol to the two major crypto assets, Bitcoin (BTC) and Ethereum, evaluating how altcoin would fare in the future.
Cowen notes that while MATIC has been doing well against the US dollar of late, how it compares to BTC is also an important metric.
“We know that for us to really have a sustained breakout, we would like to see Bitcoin ideally return above the bull market support band. That would be the best scenario for MATIC if Bitcoin can break above those levels again.
Right now, Bitcoin is still below the level and MATIC is still recovering, so who am I to say that it can’t get above it?
But in order to have the best market conditions, we would like Bitcoin to go back … to $ 53k or so. [That] it would actually be quite ideal and would prepare MATIC for an ideal situation. “
As of this writing, Bitcoin is trading even during the day at $ 50,297.
The next step for Polygon diagnostics is the MATIC / ETH trading pair, which Cowen believes is the ultimate barometer of altcoin’s strength or weakness.
“Now the real test, as we all know, is what does it do against Ethereum? What if it bleeds against Ethereum? Does it bleed? Not really.
This is a pretty nice trend here. And you can see that more recently it started to sprout again …
It seems to have support at these levels. [0.00036916 ETH, or about $1.62], is again above the bull market support band, and is also approaching the previous all-time high in terms of the MATIC / ETH valuation.
To get there, it would need to go up another 61% or 62% for a constant Ethereum valuation. That would actually take MATIC’s valuation to more than $ 3.50 or so. “
Ethereum is currently up 2.75% on the day at $ 4,405.
Cowen concludes his analysis by saying that he likes the general perspectives of MATIC.
“I think it’s a good project and it will likely continue the upward trend for the duration of the cycle and advance a few more ranks in the current market cap rankings of many different altcoins.”
However, any rejection of Bitcoin itself would be bad news for altcoins in general.
“It looks like it is breaking out against Bitcoin after holding support for a while. It looks like it’s breaking something against Ethereum …
The main downside risk, [as] With all altcoins, it is if Bitcoin is rejected in its attempt to break above the bull market support band.
If that happens and it goes down again, then there is a greater chance that most altcoins will bleed out against the US dollar, and against Bitcoin, and even against Ethereum. “
MATIC is changing hands for $ 2.44 at time of writing. It is up 4.41% during the day and 55.4% from its weekly low of $ 1.57 on December 3.
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