Will MATIC Benefit from the Hype Around zkEVMs?

The zkEVM sector is experiencing heightened competition as interest surges in protocols such as StarkNet, zkSync Era, and Polygon’s zkEVM. Notably, these protocols have seen an increase in daily active addresses and Total Value Locked (TVL), as observed by the Twitter account Emperor Osmo on June 18th.

The rising interest in these zkEVM solutions can be partly attributed to the anticipation of token AirDrops. Currently, zkSync Era and StarkNet do not have native tokens, leading many to speculate that a token drop may be on the horizon. However, it’s important to consider that once the AirDrop occurs, the initial hype may fade, potentially causing some users to move away from these protocols.

In contrast, the activity on the Polygon zkEVM has not been solely driven by the anticipation of AirDrops. Therefore, the network’s activity may remain sustained in the long run, providing a stable foundation for continued growth.

Another factor contributing to the increased interest in zkEVM solutions is Ethereum’s upcoming Cancun upgrade. The introduction of Danksharding, a key component of Cancun, allows rollups to send information at reduced costs through data blobs. This enhancement improves scalability and cost-effectiveness within the zkEVM ecosystem, offering users more affordable transactions and alleviating the burden of high data storage and processing fees.

While Polygon holds a favorable position in the zkEVM space, there is still potential for growth in its native token, MATIC. Although the token experienced a significant % price drop of 40% between June 5th and 10th, it has since fluctuated within a range of $0.677 to $0.505, with the current value at $0.598.

Analyzing the Relative Strength Index (RSI) reveals a value of 42.50, indicating a slight advantage for buyers in terms of momentum. Additionally, the Chaikin Money Flow (CMF) sits at 0.04, signifying positive cash flow into the MATIC market. These indicators suggest buying pressure and increased accumulation of the asset.

The recent decline in MATIC’s price may be attributed to a decrease in network growth, indicating waning interest from new addresses. Moreover, the declining trading volume on Polygon has raised concerns among 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.

The zkEVM sector is witnessing intense competition, driven by increased interest in protocols like StarkNet, zkSync Era, and Polygon’s zkEVM. Anticipation of token AirDrops and Ethereum’s Cancun upgrade have fueled this growth. While Polygon holds a favorable position, the MATIC token has experienced price volatility. Market participants continue to monitor network growth and trading volume for insights into market health and investor sentiment.