Analysis

Polygon vs Optimism: Which altcoin will Q3 favor?

OP has a clear lead as MATIC struggles to shrug off regulatory uncertainty. But both must deal with overhead roadblocks to reinforce extra bullish intent in Q3.

Published

1 year ago

on

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

  • MATIC’s regulatory uncertainty dented its price performance.
  • OP has seen massive accumulation since early June, unlike MATIC. 

The L2 solutions space has been under fierce competition, with Arbitrum [ARB], Polygon [MATIC], and Optimism [OP] angling for a share. MATIC sustained more regulatory pressure on price performance, giving competitors like OP more edge on the price charts. So, evaluating Polygon vs Optimism is crucial for 2023 Q3.

Read Polygon’s [MATIC] Price Prediction 2023-24

For perspective, the bearish pressure in Q2 saw both altcoins breach key psychological levels. MATIC dropped below a dollar while OP lost hold of $2. However, each token reacted differently to early Q3 recovery and could offer a glimpse into likely Q3 overall price performance. 

Reaction to Bitcoin’s swings

Source: MATIC/USDT on TradingView

In early June, the US SEC sued Binance

and Coinbase for flouting federal securities law and enlisted several tokens as “security.” The regulatory pressure saw BTC ease to $25k, up from $27k – an 8% drop. 

MATIC and OP registered massive drops in the same period. Notably, MATIC, classified as a security by US SEC, dropped from $0.90 and only steadied near $0.50 in the same period. That’s a 44% drop because of BTC’s losses and U.S. regulatory pressure. 

In the same period, OP dropped from $1.5 to around $0.9 before steadying near $1. The drop led to about a 41% drop in value. 

Source: OP/USDT on TradingView

So MATIC shed more value than OP during the bearish and regulatory pressure at the end of Q2. But BTC outperformed both altcoins in the same period.   

Is your portfolio green? Check out the OP Profit Calculator

The picture was slightly different during the recovery phase between mid-June and July. BTC rebounded strongly from $25k and reclaimed $31k amidst ETF-induced hype from institutional players. It rallied over 20% during the hype (15 – 21 June). 

The BTC upswing saw OP hike over 40%, reversing all losses from early June. But MATIC only gained about 20% and hit $0.67, way below its $0.90 before US SEC labelled it security. So, OP outperformed BTC and MATIC during the recovery. 

In July, BTC fluctuated between $29.5k and $31.5k after ETF hype dissipated. So, OP entered a brief range formation before mounting above the June high ($1.55) after Ripple Labs’ legal win. Further upside was only blocked by the D1 bearish order block (OB) of $1.63 – $1.88 (red).  

Ripple Labs’ win also boosted MATIC. It soared closer to $0.90 (June high). But both tokens faced price rejection after BTC’s sharp drop towards its range-low of $29.5k in the past few days. 

Polygon vs Optimism: Q3 outlook

A likely hawkish stance could exert a little bearish pressure during next week’s (25/26 July) FOMC meeting. MATIC could play defense on the $0.757, a December low aligned with a recently invalidated bearish OB. 

For OP, bulls will focus on $1.37, slightly above the H12 bullish OB of $1.4 – $1.5 (cyan). OP thus has a firm bullish stronghold it could rebound from. 

Unfortunately, both tokens must clear crucial overhead roadblocks (bearish OBs) to reclaim key psychological levels of $1 (MATIC) and $2 (OP) to show extra bullish intent in Q3. 

Sell vs buy pressure

Source: Santiment

Based on Santiment’s 90-day Mean Coin Age metric, we can infer that OP has more potential upside than MATIC at the time of writing. For perspective, the metric tracks the movement of tokens across addresses. 

If the metric rises, it indicates a wide-network accumulation, a clear sign of players hopeful for a likely rally in the future. The opposite is true – the drop underscores sell pressure. For MATIC, the latter holds.

However, OP registered a steadily rising 90-day Mean Coin Age, a bullish cue if BTC maintains the 30k in Q3. 

Source: Santiment

Although there was a fluctuation in volume for both tokens, OP saw more buying pressure, while MATIC sustained selling pressure. The regulatory uncertainty around MATIC could further give OP an edge on the price charts.

How much are 1,10,100 OPs worth today? 

Who’s likely to ace Q3?

Based on the above indication, in the race between Polygon vs Optimism, the latter could ace in Q3, given its massive accumulation witnessed from early June and MATIC’s regulatory uncertainty. 

Moreover, OP handled early June’s massive sell pressure better than MATIC. After that, the recovery saw OP outperform BTC and MATIC on the price charts. So, OP could offer extra gains and sustain more bearish pressure than MATIC in Q3. 

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