104 Interactions, 2 Today
Matic Network joined with Chainlink over two years ago, in June 2019, to enable decentralised oracles on its Layer 2 sidechain network.
At the time, this breakthrough resulted in significant improvements for both alts. Chainlink increased about 250 percent in June 2019, around the time of the announcement, while MATIC increased nearly 50 percent. Collaboration and integrations are well known to add a lot of traction to projects in general.
In fact, MATIC is well-known in the crypto industry for forming long-term collaborations. It was recently a part of the so-called “first blockchain merger” with Hermez. The news of HEZ officially combining with Polygon and adopting the moniker “Polygon Hermez” sparked some interest in both alts.
Without a doubt, this can help the altcoins’ price rally. MATIC has clearly done well in this regard, whereas LINK has slacked off a little.
Nonetheless, LINK and MATIC have had a fairly comparable price pattern in recent months. But it remains to be seen whether the alts’ parallel movement can propel them to their new ATHs, and what their metrics imply.
This is what metrics say
Velocity for MATIC and Chainlink was on a downtrend. In fact, LINK’s velocity had an almost steep downward fall. Velocity shows how quickly coins are circulating within the network. When it is low, it means that an average coin is circulating less than before. LINK’s low velocity was indicative of lower on-chain transaction volume.
Furthermore, both coins had recently lost network activity. The similar thing was noticed when active addresses for MATIC and LINK looked to be dropping. The coins appeared to be losing retail excitement as consolidation took over their charts.
What does the price action indicate?
Notably, MATIC and LINK have been declining since last week. While MATIC experienced weekly losses of 8%, LINK saw weekly losses of 12%. On the daily chart, RSIs for both assets had been in a downtrend since August 24, but had seen a modest rise at press time, indicating some buying pressure.
The good news for LINK investors was that Chainlink had nearly identical trade volumes throughout this surge as it did during the April-May rally. Many alts, notably MATIC, were not in this category. With the wider market still recovering from consolidation at the time of writing, a price increase for MATIC and LINK is not out of the question.
However, they both face major resistance ahead and it looks like they must encounter hurdles before breaching their ATHs.