21 JAN 2022 (FRI)- Polygon (MATIC) Report Card

By quantdoge | Daily Crypto Risk Report | 21 Jan 2022


Investment Disclaimer:

  • I am not a registered investment, legal, or tax adviser or a broker/dealer, and all opinions expressed by me are from my research for educational purposes only.
  • Past performance presented here is not an indicator of future performance.
  • This post expresses my own opinion about the cryptocurrency mentioned herein and is not an offer to buy or sell, or a solicitation of any offer to buy or sell the cryptocurrency mentioned in this post.
  • I do hold a long position in MATIC as a token holder.

1A. Top 3 Good News for MATIC HODLERS !!!

1B. Top 3 Bad News for MATIC HODLERS !!!

2. How Polygon Performs Relative to Other Cryptos ?

Performance of All Cryptos Under Quantdoge Watchlist since 2021 (Sorted by % Return)

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MATIC has undergone 11,484.09% return from USD 0.0176 to USD 2.0388 since 01 Jan 2021. MATIC is the 4th best performing crypto assets among others here.

3. How Resilience Polygon Is Towards Bitcoin Crash Relative to Other Cryptos ?

Historically, all altcoins are somewhat dependent on Bitcoin price movement and it’s often the case where if Bitcoin falls, most altcoins would follow.

Top 3 Cryptos That Are Most Resilient To Bitcoin Crash During Each of BTC 4 Largest Crashes in 2021

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MATIC has proven resilience against BTC crash in 1 out of the 4 instances.

During the last 4 BTC market crashes,

When BTC dropped by -13.47 %, MATIC returned -30.77 % at 20 May 2021,
When BTC dropped by -13.13 %, MATIC returned -16.28 % at 22 January 2021,
When BTC dropped by -12.16 %, MATIC returned 1.15 % at 13 May 2021,
When BTC dropped by -11.39 %, MATIC returned -21.44 % at 22 June 2021

4. Technical Analysis on Polygon


4.1. Volume Weighted Average Price (VWAP)

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VWAP is a technical indicator used by a trader to gauge the overall trend of an asset price movement. VWAP line (orange line) represents the volume-weighted average price (average price here is defined as the average of high, low and close prices) while close price line (blue line) represents the price when MATIC is closed at the end of every single day. 

Whenever blue line (close price) is above orange line (VWAP), it indicates that the asset is gaining momentum and being traded higher than its average price level. This would represent a 'buy' opportunity for short-term momentum trader whom task is to trade following the trend while a longer term mean-revision trader might take it as a 'sell' opportunity, anticipating that the price of MATIC (blue line) to fall to its average level (orange line).

Whenever blue line (close price) is below orange line (VWAP), it indicates that the asset is losing momentum and being traded lower than its average price level. This would represent a 'sell' opportunity for short-term momentum trader whom task is to trade following the trend while a longer term mean-revision trader might take it as a 'buy' opportunity, anticipating that the price of MATIC (blue line) to rise to its average level (orange line).

As of 20 Jan 2022, VWAP is suggesting that MATIC is losing momentum at an increasing rate as crypto market sinks today.

4.2. Moving Average Convergence Divergence (MACD)

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MACD is often used by trader as a momentum indicator. There are 2 lines that form the above charts, namely MACD (12, 26) lines and Signal(9) line, while the histogram is calculated by subtracting Signal (9) from MACD (12,26). Histogram would fall to the negative territory whenever MACD (12, 26) is trending at a lower level than Signal (9) and rise to the positive territory whenever MACD (12,26) is trending at a higher level than Signal (9).

MACD (12, 26) is computed by subtracting the 26-day exponential moving average (EMA) of MATIC closing price from its 12-day EMA. 
Signal (9) on the other hand is calculated as the 9-day EMA of MACD (12,26). 

As MACD (12, 26) goes higher away from Signal (9), it signifies that MATIC is gaining momentum and whenever it goes trends at a lower level than Signal (9),it signifies that MATIC is losing momentum. 

As of 20 Jan 2022, MACD is suggesting that MATIC is losing momentum at an increasing rate as crypto market sinks today.

4.3. Bollinger Band

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Bollinger band is often being used by mean-reversion trader as a gauge to assess how undervalued or overvalued an asset is. Its chart made up of 4 lines, namely:

- SMA (20) (blue line), which is the 20-day simple moving average price of MATIC
- Upper Band (orange line), which is computed by adding 2 standard deviations of MATIC on SMA (20)
- Lower Band (red line) , which is computed by subtracting 2 standard deviations of MATIC from SMA (20)
- Close (green line), which is the daily closing price of MATIC

Whenever close line (green) touches the lower band (red), it indicates that MATIC is corrected too much and is being traded at an undervalued level, representing a 'buy' opportunity. On the other hand, whenever close line (green) touches the upper band (orange), it indicates that MATIC is gaining too much momentum and is being traded at an overvalued level, thus indicating a 'sell' opportunity. 

As of 20 Jan 2022, Bollinger Band is suggesting that MATIC is being massively oversold and is now trading at the level that is way below its 20-day simple moving averages.

4.4. Relative Strength Index (RSI)

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Just like Bollinger Band, Relative Strength Index is often being used by mean-reversion trader as a gauge to assess how undervalued or overvalued an asset is. There are 2 psychological levels, i.e. 30 and 70 in RSI. Whenever the RSI reaches 30, it indicates that MATIC is corrected too much and is being traded at an undervalued level, representing a 'buy' opportunity. On the other hand, whenever RSI reaches 70, it indicates that MATIC is gaining too much momentum and is being traded at an overvalued level, thus indicating a 'sell' opportunity. 

As of 20 Jan 2022, RSI is suggesting that MATIC is neither oversold nor overbought.

4.5. Price and Volume Analysis

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Based on the price and volume data extracted, the recent MATIC bearish phase was accompanied by lesser volume as compared to Dec last year where a massive sell-off was embedded by a much higher volumes than today. If MATIC current daily active trading volume continues to hold, quantdoge expects the recent dip to be not as severe as the previous cycle.

Based on the technical analysis presented above, quantdoge holds the opinion that MATIC is undervalued but it may not be a right time to mass purchase MATIC now as the crypto market dump continues, but I could be wrong, hence please make your careful due diligence before making any financial decision. 

5. MATICUSDT Futures Activities on Binance Futures

Following visuals were built on top of public data extracted from Binance using Binance USD-M Futures API as of 21 Jan 2022 10:34 UTC time. 

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Above ratio was constructed by dividing total bid orders by total ask orders, a ratio of greater than 1 indicates that there are more buyers than sellers while any ratio less than 1 would mean that there are more sellers than buyers. As of 21 Dec 2020 10:34 UTC time, this ratio is the highest for MATICUSDT futures while there are more short positions opened against the long positions for ETHUSDT and BTCUSDT which often deemed as a safer crypto asset.

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At the time of writing, MATIC is trading at USD 1.91. Largest buy orders were placed at USD 1.87 while largest sell orders were placed at USD 1.95. On an order flow basis, USD 1.85 could be treated as MATIC support level which if MATIC happened to drop below this price level, quantdoge would expect MATIC to drop further. On the other hand, USD 2.00 could be treated as MATIC resistance level which if MATIC happened to exceed this price level, quantdoge would expect MATIC price to further increase. 

Overall, 53.67% of MATICUSDT futures traders are taking long positions on MATIC while the remaining 46.33% of them are taking the short sides.

6. Polygon Risk Profile

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Based on the 100-day 95% historical Value-at-Risk (VaR) profile of Polygon defined above, MATIC seems to trade at a higher risk level on 20 Jan 2022 as compared to 10 days before on 10 Jan 2022, with its biggest pullback being seen at - 14.59% on a single day during the last 100 days. However, I could be wrong, hence please make your careful due diligence before making any financial decision.

7. Google Trends Analytics

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polygon matic reached its peak in Google Search on 2021-05-16 with a Google Score of 100
Over the last quarter, polygon matic Google Score has increased 8.43 % from 41.5 to 45.0
Over the last 6 months, polygon matic Google Score has increased 61.87 % from 27.8 to 45.0

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Over the last month, Polygon Matic was most sought after from St. Helena, North Macedonia and Singapore.

9. Developer Activity Analytics

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Fork

Fork refers to the amount of time where the Github repo of current cryptocurrency is being copied. Higher fork number could mean that this cryptocurrency project is getting more interest in the developers community who likes to explore more on the deep technical of this project.

Polygon forks increased 172.73% from 55 to 150.0 in the past year.

Star

Star refers to the number of developers who bookmark the Github repo of current cryptocurrency. Higher star number could mean that this cryptocurrency project is getting more general interest in the developers community.

Polygon stars increased 304.4% from 91 to 368 in the past year.

Pull Request

Pull request contributor refers to developer who has made a successful improvements/ modifications on the Github repo of this current cryptocurrency project. Higher number of pull request contributors could mean that there is a high number of commitment given by developers to this cryptocurrency project.

However, a low number also could mean that the developer community of this project applies a strict standard when it comes to code review, so only developers who have published a high quality code with highly impactful features got approved.

Polygon pull request contributors increased 13.33% from 15 to 17 in the past year. 

If you like my analysis and articles, please follow me at @quantdoge for daily updates.

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quantdoge
quantdoge

Data scientist in crypto and blockchain space.


Daily Crypto Risk Report
Daily Crypto Risk Report

This blog was created by quantdoge, a data scientist in the cryptocurrency and blockchain space to publish daily risk reports on different cryptocurrencies. All published reports in this blog were analyzed with in-house algorithmic trading and quantitative risk management technology. ** Investment disclaimer: ** I am not a registered investment, legal, or tax adviser or a broker/dealer, and all opinions expressed by me are from my research for educational purposes only.

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