Binance Chain discontinued BEP2 MATIC; what does it mean for Polygon?

Key Takeaways:

• Binance Chain (not Binance Smart Chain) will discontinue blockchain interoperability network Polygon’s BEP2 MATIC token.
• Technical indicators on the MATIC chart point at a looming decline.

YEREVAN (CoinChapter.com) – The ‘internet of blockchains’ Polygon announced on Jan 12 that Binance would discontinue the MATIC BEP2 token due to low usage. In detail, BEP2 (Binance Chain Evolution Proposal 2) is a token issuance standard on the Binance Chain.

The company specified that Binance Chain had 150 million BEP2 MATIC tokens to provide liquidity since 2019. The said tokens will be swapped for ERC-20 MATIC from Foundation Wallet at 11:00 GST, Jan 12. An ERC-20 is a standard the Ethereum Network uses for smart contract issuance.

Corrected:
MATIC BEP2 Discontinuation

In consultation with @binance, due to low usage, MATIC BEP2 will be discontinued.

The 150mn BEP2 MATIC provided for liquidity on BinanceChain(not BSC) in 2019 will be swapped for ERC20 MATIC from Foundation Wallet at 11:00 GST, Jan 12th
1/2

— Polygon | $MATIC 💜 (@0xPolygon) January 11, 2022

If you hold BEP2 MATIC please move them to Binance and withdraw MATIC on Ethereum, Polygon, or BSC. All BEP2 MATIC will be burned when all users are done swapping.

added Polygon in the thread.

Also read: Associated Press plans to launch Polygon-based NFT marketplace

While BEP2 MATIC’s discontinuation rings an alarming bell, Polygon’s total value locked (TVL) didn’t quiver and stood at $5.36 billion on Jan 12. However, despite a possible short-term uptrend, MATIC painted a bearish picture on the charts.

Polygon (MATIC) Price charts; what to expect?

CoinChapter reported in the previous Polygon review that the digital asset has traded in an Ascending Channel since late July. Following the setup, MATIC could soar to a new all-time high of approximately $3.00 before the end of January.

The Channel features parallel trendlines that enclose the price action and drive it up while preventing sharp moves outside the formation. It does not predict a particular bias after the setup is exhausted, but it is instrumental in determining short-term price vectors.

However, the weekly chart outlook seems bearish. Polygon token formed a Rising Wedge, which is a bearish reversal pattern. It could result in a downtrend in Q1-Q2 2022.

Moreover, MATIC faced a bearish relative strength index (RSI) divergence and a trading volume divergence. In detail, the RSI is a momentum indicator that reflects the traders’ perception of an asset’s return capabilities. Thus, when the RSI graph doesn’t follow the bullish price action, it could induce a sell-off.

The trading volume marked the same deviation. Price action progressed, while the trading volumes declined over the same period. The divergences hint at a looming trend reversal and support the Rising Wedge prediction.

Also read: Polygon (MATIC) faces a 50% gain, but bears are up for battle

According to technical indicators, Polygon is headed south in the current quarter. However, the Network’s TVL doesn’t budge to the bears, as the ‘internet of blockchains’ signs new deals. The upcoming week will show if the technical warnings have merit.