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Polygon (MATIC/USD) price continued its downward trend as investors react to the latest disappointment in the blockchain industry. MATIC pulled back to a low of $1.03, the lowest level since March 11. It has dropped by over 15% from the highest level this month.
Disney and Meta blockchain plans
Polygon, the biggest layer-2 blockchain network in the world, has come under intense pressure in the past few months. A closer look at key metrics shows that the network is losing market share to other layer-1 and layer-2 networks like Optimism and Arbitrum.
In March, Meta Platforms announced that it was abandoning its non-fungible token (NFT) venture as it laid off thousands of people. That was a major disappointment to Polygon and Flow, since the company was using their technology for these operations.
Meta was to leverage its large scale to make it possible for people to buy and sell NFTs in key platforms like Instagram and Facebook.
Polygon has also been hit after Disney decided to eliminate its metaverse project. According to the WSJ, the company decided to eliminate its next-generation storytelling and consumer unit. The division was creating metaverse platforms for its key franchises like Mickey Mouse and its theme parks.
The division was closed as part of the ongoing layoffs in the country that will see over 7,000 people lose their jobs.
Polygon has had a relationship with Disney for a while. In July last year, the company was one of the six companies that joined its accelerator program. Therefore, it can be assumed that the firm was using its technology for the metaverse.
The same trend is happening in other industries. For example, data shows that Polygon has a total value locked (TVL) of $1 billion, which is smaller than Arbitrum, which has a TVL of over $2 billion.
Polygon price forecast
MATIC chart by TradingView
The 4H chart shows that MATIC price has been in a strong bearish trend in the past few weeks. Along the way, the coin has formed a falling wedge pattern, which is usually a bullish sign. Polygon has moved below the 25-period and 50-period moving averages while the Relative Strength Index (RSI) has continued falling.
Therefore, in the near term, there is a possibility that Polygon price will have a bullish breakout as buyers target the key resistance at $1.20. A move below the support at $1 will invalidate the bearish view.