DeFi

Base

Optimism

Polygon

Polygon price has been in a downward trend in the past few months as it continued to lose market share in the layer-2 industry.&nbsp; 
<a href="https://crypto.news/price/polygon/" target="_blank" rel="noreferrer noopener">MATIC</a> dropped to the key support at $0.4343 on Friday and has since pared back some of those gains. However, It remains around 60% below its highest point this year and 82% below its all-time high. 
<h2 class="wp-block-heading" id="competition-in-the-layer-2-industry">Competition in the layer-2 industry</h2> 
Polygon, one of the pioneers in the layer-2 industry, has come under pressure in the past few years as the number of competitors has risen.&nbsp; 
Its total value locked (TVL) in the DeFi industry <a href="https://defillama.com/chains" target="_blank" rel="">has dropped</a> to $872 million from a record high of almost $10 billion. In MATIC terms, the TVL has dropped from a record high of 5.7 billion to 1.78 billion today. 
Arbitrum, a leading layer-2 network has attracted 661 DeFi developers while its total value locked stands at over $3 billion.&nbsp; 
Polygon has also been passed by the likes of Base and Blast, which have $1.4 billion and $1.2 billion in assets, respectively. Optimism has also taken some market share from Polygon.&nbsp; 
This competition partially explains why the MATIC price has dropped by 82% from its all-time high. 
Despite these challenges, Polygon has some encouraging on-chain metrics. For example, data shows that it has over 1.09 million addresses, making it the second-biggest chain after <a href="https://crypto.news/tron-price-beats-xrp-ethereum-cardano-as-on-chain-metrics-boom/" target="_blank" rel="noreferrer noopener">Tron, which has 2.09 million addresses</a>.&nbsp; 
The other encouraging figure is that the number of transactions in the network have been stable. These daily transactions have remained over 3.8 million since March 11th this year.&nbsp; 
Also, the volume of stablecoins has been in a strong upward trend since October last year. As shown below, the <a href="https://defillama.com/chain/Polygon?currency=USD&amp;inflows=false&amp;tvl=false&amp;txs=false&amp;stables=true" target="_blank" rel="">volume has</a> risen from 1.17 billion MATIC to over 1.8 billion on Tuesday. Stablecoins are important in a blockchain since they are used to handle most transactions. 
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 <img loading="lazy" decoding="async" width="1024" height="380" src="https://crypto.news/app/uploads/2024/07/MATIC-Stablecoins-1024x380.jpeg" alt="Polygon stablecoins"> 
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</figure> 
Stablecoins in Polygon 
Polygon also has a higher <a href="https://www.stakingrewards.com/asset/matic-network" target="_blank" rel="">staking yield</a> than most cryptocurrencies. It has a staking yield of 5.67%, compared to Ethereum’s 3.29% and Cardano’s 2.9%. 
<h2 class="wp-block-heading" id="polygon-price-has-lost-a-key-support">Polygon price has lost a key support</h2> 
<figure class="wp-block-image size-large">
 <picture loading="lazy" decoding="async" class="wp-image-14283846"> 
 <source type="image/webp" srcset="https://crypto.news/app/uploads/2024/07/Polygon-price-1024x570.png.webp"> 
 <img loading="lazy" decoding="async" width="1024" height="570" src="https://crypto.news/app/uploads/2024/07/Polygon-price-1024x570.png" alt="Polygon price"> 
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</figure> 
Polygon price chart 
Despite these strengths, the Polygon price has dropped sharply in the past few weeks. It has also dropped below an important support level, potentially invalidating a double-bottom pattern that has been forming. 
It dropped below the key support at $0.50, where it failed to drop below in June and October 2023. Unless this drop is a false breakdown, there is a likelihood that Polygon will continue falling and reach the next support at $0.3206, its lowest point in June 2022 and 37% below the current level.

Polygon price loses final support despite strong on-chain metrics

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