Polygon [MATIC] Struggles Despite Continued User Growth: Here's Why

Polygon [MATIC] continued to attract a large amount of users over the last few months. Not only was the ecosystem able to attract users, but it was

Polygon [MATIC] has been able to garner a large amount of users over the last few months. But not only was the ecosystem able to attract users, but it was also able to retain them.

The Polygon network maintained a record of more than 1 million daily active addresses for 65 days straight, recent data showed.

However, in terms of DeFi, Polygon struggled. Overall, DEX (Decentralized Exchange) Volumes fell from $320 million to $50 million over the last few weeks.

Moreover, the TVL (Total Value Locked) for Polygon fell significantly from $1.2 billion to $980 million, Artemis data showed.

These factors impacted the revenue generated by the Polygon network significantly. Analysis by AMBCrypto of Token Terminal’s data revealed that the revenue generated by the network fell by 42% over the last month.

Similarly, Development Activity fell by 14% in the last 30 days.

If the number of code commits on the network continue to decline, it can have a significantly negative impact on the Polygon network.

The token didn’t have a positive time in terms of price movement as well. Since the 9th of April, the price of MATIC has decreased, making lower lows and lower highs.

This pattern of price movement indicated that a bearish trend was present on the daily chart. Despite MATIC’s several attempts to reverse this trend, the price remained largely consolidated between the $0.7802 and $0.6346 levels.

The price would need to retest and weaken the $0.7802 resistance level for a reversal to be realized.

The Relative Strength Index (RSI) on the daily chart fell materially during this period, suggesting that bullish momentum around MATIC had weakened.

On the plus side, the Chaikin Money Flow (CMF) grew, indicating that the money flowing into MATIC surged.

At press time, MATIC was trading at $0.7191.