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Polygon (MATIC) Price Forecast: Can 15.2M New Users Drive Rally to $1?

By:
Ibrahim Ajibade
Published: Jan 25, 2024, 10:07 UTC

A recent crypto industry report by Flipside Crypto shows Polygon surpassed Bitcoin user growth in 2023. How could this impact MATIC price action in 2024? 

Polygon MATIC price

In this article:

Key Insights: 

  • Polygon (MATIC) price performance has been relatively flat in recent months, but a recent on-chain report by Flipside Crypto has revealed a vital bullish signal.
  •  Polygon (MATIC) recorded 15 million new user addresses in 2023, 50% higher than Bitcoin (BTC).
  • In terms of short-term price action, MATIC bulls face an uphill task at $0.80 resistance. 

A recent crypto industry on-chain report by Flipside Crypto has shown that Polygon surpassed Bitcoin in user growth for 2023. How could this feat impact MATIC price action in 2024? 

Founded in 2017, Polygon is a Layer-2 project built on the premise of scaling up smart contracts and mitigating high transaction costs on the Ethereum (ETH) main net. Since its inception, the Polygon network has remained a big player in the layer-2 scaling sector. 

Polygon (MATIC) recorded 15 million new users in 2023

Polygon (MATIC) price has delivered a relatively flat performance in recent months. As the crypto market rallied in Q4 2023, mega-cap altcoins like Solana (SOL), Cardano (ADA), Avalanche (AVAX) closed the year with triple-digit quarterly gains.

But, in contrast, MATIC failed to reclaim a new yearly peak as 2023 slammed shut. The tepid price action has been attributed to markets reacting skittish to Polygon’s proposed transition to a new ‘POL’ native token, announced in July 2023.

However, a recent on-chain report by Flipside Analytics has cited fundamental growth signals that could impact MATIC price action positively in 2024.

According to the report, Polygon recorded 15.2 million new user addresses in 2023, claiming top spot behind Ethereum (ETH).

Polygon (MATIC) Ranks 2nd in User Acquisition for 2023 | Source: Flipside Analytics
Polygon (MATIC) Ranks 2nd in User Acquisition for 2023 | Source: Flipside Analytics

The acquired user count tracks the number of new wallets created on a blockchain network during a particular period. Essentially, this serves as a proxy for user acquisition rate, and adoption. 

Polygon’s new user count of 15.2 million for 2023 was 50% higher than Bitcoin’s 10.6 million. 

Also notably, Arbitrum (ARB), Optimism (OP) and Base also made the top 8 list of the best-performing projects in terms of user growth. This emphasizes the importance of Layer-2 scaling projects as one of the fastest growing sectors in crypto. 

A significant increase in new user count suggests that Polygon network is attracting new network participants at a rate higher than Bitcoin and its Layer-2 competitors.

If the user growth is sustained in 2024, it could evolve into increased market demand for the MATIC (POL) token as these new entrants begin to intensify their network usage over time. 

Polygon New User Transactions on the Rise

As the 15.2 million new Polygon network participants begin to utilize MATIC in daily transactions, the organic growth in market demand could impact prices positively in the long run. 

In confirmation of this stance, a vital on-chain data trend shows Polygon has begun to record a substantial number of transactions from new users. 

IntoTheBlock’s ‘new adoption rate’ metric, tracks the percentage of a network’s total daily transactions that is being executed by new users.

On average, 37% of Polygon (MATIC) daily transactions in the past month were from new wallets transacting for the first time, as depicted in the chart below. 

Polygon (MATIC) New Adoption Rate | Source: IntoTheBlock
Polygon (MATIC) New Adoption Rate | Source: IntoTheBlock

 This growth in Polygon new user transactions further affirms the stats presented in Flipside analytics report. It also shows that a significant portion of the 15.2 million new addresses recorded in 2023 are becoming active network participants. 

MATIC Short-Term Price Prediction: $0.8 Resistance Looms Large

Based on Polygon’s user growth, token upgrade and strategic partnerships, MATIC looks set for positive price movement in 2024.

However, in terms of short-term price action, MATIC is currently trading at $0.73 at press time on Jan 25, as the bulls currently face an uphill climb at the $0.80 resistance.

IntoTheBlock’s global in/out of the money around price data groups the current Polygon token holders by their historical entry prices. 

Polygon (MATIC) Short-term Price Prediction: GIOM data | Source: IntoTheBlock
Polygon (MATIC) Short-term Price Prediction: GIOM data | Source: IntoTheBlock

It currently shows that 62,240 wallets had acquired 5.6 billion MATIC at the average price of $0.80. Notably, this is the largest cluster of current Polygon token holders. Without a significant momentum boost, the bulls could struggle to break above $0.80 in the short-term. 

But on the flipside, if the bulls can scale $0.80, it could promptly open the doors to a retest of the $1 area.

About the Author

Ibrahim Ajibade Ademolawa is a seasoned research analyst with a background in Commercial Banking and Web3 startups, specializing in DeFi and TradFi analysis. He holds a B.A. in Economics and is pursuing an MSc in Blockchain.

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