The price of Polygon went on to reverse its course to the upside on the 10th of May after it tested out at $0.794 as its interim support. This led to an increase in their price by 25% to $0.99. The price rebound took place a day after the token managed to slump over by 17% to reach a price of $0.787, its lowest level since the July of 2021- which also came amidst a global market crash that was led by the hawkish policies of the US Federal Reserve.
The price of MATIC then went on to rebound after it went through five days of relentless declines, which attracted buyers around the same support level that had already preceded a bull run of 275% the previous year.
Polygon Could Have Its Price Affected By Motions from The Federal Reserve
However, it is also true that the market has changed a lot between July 2021 and May 2022, which could potentially influence the Polygon traders’ behavior. As an example, the price boom of MATIC took place last year at the same time that the demand for layer-2 solutions increased due to the increasing transaction and gas fees. As a result of this, several DeFi applications, which also include decentralized exchange SushiSwap, liquidity service Curve, and Aave expanding their operations in the chain of MATIC.
On a cumulative whole, 2022 has been a pretty bad year for most cryptocurrencies like Polygon. The decision of the Federal Reserve to hike the interest rates which was then followed by the unwinding of their $9 trillion balance sheet has already prompted most investors to reduce their exposure to far riskier assets. Unfortunately, the prospect of excess cash leaving the crypto market can be quite a sore spot for the blockchain, whose year-to-date paper returns were under zero.
On the 9th of May, Ryan Watt- the CEO of Polygon, went on to announce that they were partnering with Meta in order to create an NFT platform for both Instagram and Facebook.