MATIC has 16% upside potential as Polygon prepares to release the Etrog mainnet upgrade

MATIC, the native token of Ethereum's largest scaling solution plans to deploy the Etrog mainnet upgrade on Tuesday, February 6. This upgrade is key for the MATIC hodler as it will transform the Ethereum blockchain. Polygon to Type 2 zk-EVM allows developers to deploy code directly on the chain, just like on Ethereum, without any additional modifications.

Polygon is set to release the Etrog mainnet on February 6

Polygon plans to convert the Ethereum zero-knowledge Virtual Machine (zk-EVM) network into a Type 2 zk-EVM network. The difference is that the upgrade will simplify the process for developers to deploy their code on Polygon, attracting more protocols to the chain and increasing its utility. Developers can simply copy-paste their code exactly as it is on Ethereum, without any further modifications to the Polygon blockchain. This is a significant development and will be operational on February 6.

Onchain metrics signal bullish potential for MATIC

MATIC supply on exchanges decreased between January 19 and February 4, as seen on Santiment. A reduction in supply on exchanges typically reduces selling pressure on the asset and paves the way for a recovery in its price.


MATIC supply on exchanges and price. Source: Santiment

Whale transactions valued at $100,000 or more decreased in MATIC over the same time frame. The decline in whale trading coincides with net Profit/Loss on the network, signaling reduced profit-taking by large-wallet investors. The reduced number of whale trades combined with reduced profit-taking is supporting MATIC price growth.



Number of MATIC whale transactions and net profit/loss on the network. Source: Santiment

MATIC price likely to increase 16%

MATIC price increased 122% between October 12 and December 27. The asset has faced rejection from its peak of $1.09 in December. Since then, MATIC price has downtrend, forming lower highs and lower lows. MATIC is currently trading below an extended bullish imbalance zone from $0.78 to $0.79. This zone currently holds as resistance and the altcoin is poised to witness a trend reversal if the daily candle close occurs above the bullish imbalance zone. The relative strength index (RSI) increased slightly from 45.08 to 46.35 over the past 24 hours. The rise in the RSI indicates a possible recovery on the daily timeframe.



MATIC price chart and RSI indicator. Source: TradingView

Similarly, the histogram bars of the moving average convergence divergence (MACD) are flashing blue. The bulls are in control. The Awesome Oscillator (AO) bars signal a trend reversal may be underway, and the next target for MATIC price is the 38.2% Fibonacci retracement of the decline from the $1.56 May 18 peak 2 2023 to a low of $0.51 on June 10, 2023 at $0.91, up nearly 16% from the current price.


MATIC price chart and MACD and AO indicators. Source: TradingView

If MATIC price sees a daily candle close below the 23.6% Fibonacci retracement level at $0.76, the altcoin's bearish trend is likely to remain. MATIC price may find support at the January 23 low of $0.69.