Ethereum vs Polygon: Interdependency and Price
The close relationship between Ethereum [ETH] and Polygon [MATIC] benefits both ecosystems. One is a main blockchain network bogged down by scalability issues, while the other is a scaling solution – a perfect match made in heaven.
But to what extent does this relationship and mutual inclusivity affect their price performance? Can investors get a clue on this front to gauge the assets’ potential outlook in 2023? Read along for some answers.
Ethereum and Polygon Price Performance Comparison
Before evaluating the interdependence of these assets from a price action angle, it’s prudent to check how they reacted to Bitcoin’s [BTC] swings and overall performance in Q1 2023.
For perspective, BTC posted a stellar performance in Q1 2023 – offering over 70% gains after rallying from $16.5k to $28.5k.
In the same period, ETH posted 55% gains, rallying from $1,190.5 to $1,847.3. The measurement is taken from the lowest candlestick wick on 1 January and the highest wick on 31 March.
On the other hand, MATIC hiked 51%, jumping from $0.7477 to $1.1235 in Q1 2023. From the above performance, it’s clear BTC outperformed the altcoins. However, ETH posted 4% more gains than MATIC in the same period.
The altcoins also reacted differently to BTC’s drop in the second half of April. Notably, BTC plunged 11%, dropping from $30.5k on 18 April to $26.9k on 24 April, setting the market into correction.
ETH depreciated by 15% in the same period, dropping from $2,125 to $1,806. But MATIC suffered more losses, plummeting 17.8% as it slid from $1.5681 to $1.2431. In short, ETH outperformed MATIC during BTC’s swings.
Back to our interrogation. How did MATIC perform after ETH crossed $2000?
Although the upswing was tied to BTC’s new high of $31k in mid-April, ETH’s move above $2,000 saw MATIC hit $1.25. Based on percentage, ETH hiked 16%, jumping from $1824 to $2125 between 9 – 18 April.
On the other hand, MATIC posted 28.5%, rallying from $0.9700 to $1.25 in the same period. It outperformed ETH in this instance. However, the correlation is not always positive, and MATIC doesn’t outrightly follow ETH price action.
For example, on 5 May 2023, BTC rallied 2.3%, jumping from $28.8k to $29.7k. On the same day, ETH hiked by 6.2%, increasing from $1876 to $1998.