Investment

The Coinbase effect and strong bases send Polygon (MATIC) and Skale higher


In previous bull markets, Coinbase reported one of the most consistent price movements for cryptocurrency projects, a phenomenon known as the “Coinbase effect”.

Recent notification that Polygon (MATIC), SKALE (SKL) and SushiSwap (SUSHI) will be added to the stock market and will start trading on March 11, showed that the Coinbase effect remains strong as tokens have witnessed record trading volumes and double-digit price movements since the listing.

4-hour MATIC / USDT chart SKL / USDT vs. SUSHI / USDT. Source: TradingView

Data from Cointelegraph Markets and TradingView shows that SKL was the largest recipient of the Coinbase effect and has risen by more than 200% since the announcement on March 9, while MATIC has risen by 88% and SUSHI gained a modest 7%.

SKL / USDT

SKALE is described as an “elastic network” that is designed to bring scalability to the Ethereum (ETH) network by increasing transaction capacity and reducing latency as a way to ensure that payments can be made as cheaply as possible.

According to the project’s website, Smart Solidity contracts can run “a thousand times faster at a fraction of the cost of the network” and the platform is suitable for gaming and content streaming services that are congested with congestion on the main Ethereum network.

4-hour SKL / USDT chart. Source: TradingView

Congestion and high transaction costs for Ethereum have once again proved to be a significant problem in the cryptocurrency community over the past two months, as the lure of decentralized funding and unimaginable tokens has led to significant increases in network activity and gas charges.

MATIC / USDT

Polygon (MATIC) is still in the role in 2021, with the Coinbase list being the latest event to raise the price of altcoin.

Previous significant developments include rebranding from Matic to Polygon, which occurred when the project turned to become the “Polkadot of the Ethereum network,” focusing on the transfer of interoperability with separate blockchain networks to the Ethereum ecosystem.

Since the rebranding, more projects have been integrated or migrated to a Layer 2 solution that offers significantly reduced transaction costs and faster confirmation times.

4-hour MATIC / USDT chart. Source: TradingView

The price of MATIC has risen 150% since the announcement of the Coinbase listing, and on March 12, altcoin recorded a record $ 2.6 billion in 24-hour trading.

Data VORTECS z Cointelegraph Markets Pro began detecting MATIC’s bullish outlook on March 6, ahead of a recent rise in prices.

The VORTECS score, exclusive to Cointelegraph, is an algorithmic comparison of historical and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.

Score VORTECS (green) vs. price MATIC. Source: Cointelegraph Markets Pro

As can be seen from the graph above, the VORTECS skóre score recorded a maximum of 81 days on March 6, three days before the announcement of the Coinbase list. After returning to a minimum of 48 on March 8, the VORTECS score then rose to a maximum of 89, about two days before rising prices to a new all-time high.

SUSHI / USDT

SushiSwap (SUSHI) was Coinbase’s third coin this week and received a more subdued response, although SushiSwap is one of the best decentralized exchanges and currently has $ 4.21 billion locked in its protocol.

Decentralized finance has been one of the hottest topics in the cryptocurrency sector since December 2020, but in recent weeks there has been a marked decline in activity as non-functional tokens have come to the fore.

4-hour SUSHI / USDT chart. Source: TradingView

SUSHI had previously seen a price increase of 675% in 2021, from a low of $ 2.69 on January 1 to a historic high of $ 20.57 on March 2, so it is not entirely unexpected that its price has been subdued in response to Coinbase’s announcement.

One remarkable correlation between the three projects discussed has to do with offering solutions to current problems that plague the Ethereum network.

While the Coinbase effect may have helped trigger recent price gains for each project, the greater needs of the cryptocurrency community and the solutions offered by these protocols are in a position to see further growth as active participation in the cryptocurrency ecosystem continues to increase.

The views and opinions expressed herein are those of the author only and do not necessarily reflect the views of Cointelegraph.com. Every investment and business move involves risk, you should do your own research when making a decision.





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