Ethereum’s Dencun Upgrade and Reduced Fees
Ethereum’s Dencun upgrade, introduced on March 13, significantly reduced fees for using layer-2 (L2) networks like Optimism (OP) and Polygon (MATIC) zkEVM. Following the upgrade, fees on these networks plummeted to less than $0.01 and $0.39, respectively.
Market Reaction and Price Movements
However, despite the optimistic outlook, QCP Capital predicts a potential price drop for Ethereum (ETH). As a result, ETH has declined by over 2%, with OP also dropping by more than 4%. Surprisingly, MATIC has maintained minor gains amidst this market turbulence. This raises questions about which cryptocurrency will benefit most from Ethereum’s Dencun upgrade.
Polygon (MATIC) Achievements
- Polygon (MATIC) gained significant attention as its Proof of Stake (PoS) network achieved a new milestone, surpassing 1.23 million daily active addresses.
- The Total Value Locked (TVL) in Polygon (MATIC) zkEVM experienced a notable uptick post-Dencun, reaching a new all-time high of $185 million.
- Data from Dune Analytics revealed sustained interest and engagement in Polygon’s NFT ecosystem, with high volumes of Polygon NFTs traded despite market fluctuations.
MATIC Technical Analysis
MATIC’s technical analysis presents a cautiously optimistic outlook as it navigates between its key support and resistance levels.
- The 10-day EMA at $1.238, the 50-day at $1.182, and notably, the 200-day at $1.05, suggest a bullish momentum.
- Indicators like the MACD level at 0.021 and Momentum at 0.058 subtly lean towards the positive side.
- However, caution is warranted as indicated by the RSI hovering at 55.45, and the Stochastic %K creeping towards overbought territory.
Polygon (MATIC) Outlook Scenarios
Bullish Scenario: Looking ahead, Polygon (MATIC) could pursue a bullish trajectory, aiming to surpass the resistance level at $1.335 and target $1.44. Further optimism may drive MATIC towards the $1.735 mark, supported by positive sentiment surrounding its expanding ecosystem and liquidity.
Bearish Scenario: Conversely, in a bearish scenario, if Polygon (MATIC) struggles to maintain its current level and dips below the support level at $1.04, it may face downward pressure, potentially retesting lower support levels at $0.85 and $0.554.
Optimism (OP) Network’s Token Sale and Market Reaction
Optimism (OP) Network recently made headlines with its strategic private token sale, where approximately 19.5 million OP tokens were sold.
- Just before this announcement, the OP token had surged to an all-time high of $4.85 on March 6, 2024.
- Technical analysis of Optimism (OP) token suggests a delicate position, oscillating between its first support level at $3.874 and the first resistance level at $5.036.
Optimism (OP) Token Outlook Scenarios
Bullish Scenario: If Optimism (OP) manages to surpass the resistance level at $5.036, it could signify renewed investor confidence, potentially breaking out above $5.53 and $6.692 levels.
Bearish Scenario: Conversely, a bearish outlook could see Optimism (OP) retesting its lower support levels at $3.206 and $2.044.
Conclusion
Following Ethereum’s Dencun upgrade, which slashed fees on layer-2 networks, Optimism (OP) and Polygon (MATIC) experienced significant cost reductions, fostering a favorable environment for their growth. However, QCP Capital’s cautionary stance on Ethereum’s future price hints at potential uncertainties. Amid this backdrop, MATIC maintains an upward trajectory, while OP mirrors Ethereum’s slight downturn. This mixed market reaction raises questions about who will benefit most from Ethereum’s latest development: Polygon (MATIC) or Optimism (OP).
