Polygon (MATIC) fails to rally despite EIP-1559 upgrade

Polygon has been on a notable downtrend following a recession across the broader cryptocurrency market. The dips made by the token have come as the rest of the cryptocurrency market retreats towards lower levels. Polygon (MATIC/USD) has registered a dip of 4.3% during the past 24 hours.

MTIC continues with a bearish trend despite token burning

A hard fork on the Polygon network went live this week, but this has not prevented the token from its bearish trend. During the past 24 hours, MATIC has dipped like the rest of the cryptocurrency market. However, some analysts have remained bullish about the prices.

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One analyst has predicted that the price of MATIC could push towards $2.70.However, the analyst predicted that this level could not be achieved during Q1 2022, and instead, a downtrend could continue to March 2022.

Despite news of this upgrade failing to fuel a price gain, analysts remain optimistic about a bullish trend in the future once token burning is implemented on the platform. A rally towards an ATH of $2.92 could be achieved this year due to the declining supply.

MATIC could also push towards lower levels due to the recession across the broader cryptocurrency market. In this case, the token could drop to the level of below $2.

MATIC to become deflationary

Polygon is a layer two network based on the Ethereum blockchain. The network is pursuing even more scalability through the London hard fork that went live on the network on January 18.

The implementation of the EIP-1559 upgrade on the Polygon network was eagerly awaited by traders and the Polygon community. This upgrade will burn 0.27% of MATIC tokens supply annually, making the token deflationary.

The upgrade will also bring features such as fee visibility and predictability to the Polygon network. This is expected to attract more users to the platform and increase transactions. An increase in on-chain activity on the Polygon network could signal bullish gains for MATIC.

This upgrade went live on the Ethereum network last summer. It resulted in a significant reduction in the supply of Ether tokens, which has resulted in a price gain. Analysts expect this to happen with MATIC.