Polygon: zkEVM's new achievement looks promising, what about MATIC?

Apart from transaction volume, zkEVM’s daily transaction count and the daily gas used also increased.
MATIC’s on-chain metrics suggest that investors can expect a trend reversal.

Polygon [MATIC] zkEVM has once again made the headlines with its latest achievements. Polygon (Labs), in a tweet posted on 17 May 2023, shared that transaction volume on zkEVM reached a new all-time high.

Growth and transaction volume on Polygon zkEVM hit all-time highs:

✅70% increase in TVL, the largest week-over-week jump since launch
✅Single day record for successful transaction volume: +13K, on Sunday pic.twitter.com/tA5pwfkWu9

— Polygon (Labs) (@0xPolygonLabs) May 16, 2023

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The single-day record for successful transaction volume exceeded 13,000 on 14 May 2023. During that period, fees went down.

More transactions mean more users to share in the cost of posting call data. Considering the current state of MATIC, will zkEVM’s recent success be instrumental in a change in the token’s space?

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Polygon zkEVM grows on multiple fronts

Not only did the transaction volume reach a new ATH, but as per Polygonscan, the number of daily transactions also spiked substantially.

Source: Polygonscan

Apart from this, there has been a considerable improvement in the number of unique depositors. It also looks like the network’s usage increased over the last few days, as evident from a rise in its daily gas use.

Polygon zkEVM’s TVL on the rise

Polygon tweet also mentioned that zkEVM’s TVL surged by 70%, the largest week-over-week jump since launch.

As per DeFiLlama, in the last 24 hours, zkEVM’s TVL shot up by more than 100%, which gave hope for further growth in the coming days.

Source: DeFiLlama

A look at MATIC’s state

While zkEVM continues to hit new records, MATIC, on the other hand, has been going through a tough time. According to CoinMarketCap, MATIC’s price declined by more than 2% in the last seven days.

The decline was accompanied by a rise in volume, which is typically bearish. At the time of writing, MATIC was trading at $0.8547 with a market capitalization of over $7.9 billion, making it the tenth largest crypto by market cap.

These metrics looked bullish…

As per CryptoQuant, MATIC’s Relative Strength Index (RSI) and stochastic were both in oversold positions. This can help increase buying pressure, which in turn can raise MATIC’s price.

MATIC’s exchange reserve was also decreasing, suggesting that the token was not under selling pressure.

Source: CryptoQuant

Realistic or not, here’s MATIC market cap in BTC‘s terms

Additionally, MATIC’s supply on exchanges registered a slight decline. This happened while its supply outside of exchanges went up, suggesting increased accumulation.

Negative sentiments around MATIC also seemed to have declined, as evident from a rise in its weighted sentiment. MATIC’s network growth was also high, which in general is a positive signal.

Source: Santiment