Ethereum vs Polygon: How Their Mutual Inclusiveness Affects Prices in 2023

• When talking about Ethereum vs Polygon, one has to consider several metrics.
• ETH prices remained neutral, while MATIC was bearish at the time of writing.

The close relationship between Ethereum [ETH] and Polygon [MATIC] benefits both ecosystems. One is a major blockchain network bogged down by scalability issues, while the other is a scaling solution – a perfect match made in heaven.

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But how does this relationship and mutual inclusiveness affect their price performance? On this front, can investors get a sense of how to gauge the asset’s potential outlook in 2023? Read along for some answers.

Ethereum vs Polygon: Interdependence and Price

Before evaluating the interdependence of these assets from a price action angle, it is wise to check how they reacted to Bitcoin’s [BTC] fluctuations and overall performance in Q1 2023.

For perspective, BTC posted a great performance in Q1 2023 – with more than 70% gains after rallying from $16.5k to $28.5k.

During the same period, ETH posted a 55% gain, moving from $1,190.5 to $1,847.3. It is measured from the lowest candlestick wick on January 1st and the highest wick on March 31st.

On the other hand, MATIC was up 51% and jumped from $0.7477 to $1.1235 in Q1 2023. The above performance shows that BTC outperformed the altcoins. However, ETH posted 4% more gains than MATIC over the same period.

The altcoins also reacted differently to BTC’s fall in the second half of April. Notably, BTC fell 11%, from $30.5k on April 18 to $26.9k on April 24, sending the market into a correction.

ETH fell 15% over the same period, falling from $2,125 to $1,806. But MATIC took more losses, dropping 17.8% as it fell from $1.5681 to $1.2431. In short, ETH outperformed MATIC during BTC’s fluctuations.

Read Ethereum [ETH] Price prediction 2023-24

Back to our interrogation. How did MATIC perform after ETH crossed $2000?

While the rebound was tied to BTC’s new high of $31,000 in mid-April, ETH’s move above $2,000 caused MATIC to reach $1.25. By percentage, ETH rose 16% from $1824 to $2125 between April 9 and April 18.

On the other hand, MATIC posted 28.5%, up from $0.9700 to $1.25 over the same period. It outperformed ETH in this case. However, the correlation is not always positive and MATIC does not follow ETH’s price action outright.

For example, on May 5, 2023, BTC rose 2.3% and jumped from $28.8k to $29.7k. On the same day, ETH rose 6.2% from $1876 to $1998.

But MATIC was only up 1.56%, rising from $0.9750 to $1.0085 on the same day. As such, ETH rose more than BTC and MATIC on this particular day. Therefore, the MATIC and ETH price correlation fluctuates and is hardly determined by the close relationship of the ecosystem.

That said, what is the outlook for price performance in May? Let’s get some answers from the daily charts.

ETH Price Prediction: Bears Gain Ground

Source: ETH/USDT on TradingView

At the time of writing, ETH has dropped to key support (white) near USD 1800. The RSI hovered around the median level while CMF (Chaikin Money Flow) fell and moved south – a near neutral position with increasing money outflows.

Sellers had the upper hand as it went to press. However, they will only dent the bullish sentiment if they crack the $1800 support. With any drop below $1800, ETH could drop to $1700 or $1500 (cyan). The USD 1500 support is a bullish order block formed on April 8.

However, if bulls defend the $1800 support again, ETH could rally and retest $2000 and target the recent high of $2142.

Overall, price action has been fluctuating near the $1800 support – a critical level in April.

MATIC Price Prediction: Are Sellers Subdued?

Source: MATIC/USDT on TradingView

At the time of writing, MATIC fell to key support and bullish order block at $0.9167. The level is a critical support level in Q1 2023.

The RSI and CMF fell, echoing bearish sentiment at the time of writing. However, price retested support and could impact sellers if MATIC sees some demand at the level.

A rebound could lead MATIC to rally towards the supply zone (red) near $1.2514 before experiencing any resistance.

But the price could fall to the January lows of $0.7505 if the support bursts. Such a move will show a weakening structure.

When comparing both market structures, ETH was neutral, while MATIC was overly bearish at the time of writing. Notably, ETH’s RSI has hovered near the mid-range, while MATIC’s has been below the neutral level for the past few days.

Unlike ETH, MATIC was on the verge of falling to January lows as support bursts. However, ETH’s decline could ease to $1700 before falling to the lows of the first quarter of 2023.

As such, ETH had a better price performance in Q1 and could repeat the same in Q2 compared to MATIC.

What did ChatGPT say?

Nevertheless, ChatGPT remained bullish on both assets, predicting that ETH and MATIC could hit $5,000 and $4 by June 2023.

Source: Open AI

Source: Open AI

Conclusion

Despite the mutual inclusiveness, the relationship between Ethereum and Polygon does not affect their individual price action. But both have a very positive correlation with BTC.

Read Polygons [MATIC] Price prediction 2023-24

Notably, ETH offers better returns during BTC upswings than MATIC. But there are instances where MATIC outperforms ETH, such as mid-April when MATIC gained more than 28% while ETH only posted 16%.

However, ETH has become more and more bearish lately and could see more downsides in the near term. Despite all this, it is more resistant to bearish pressures than MATIC.