Crypto Market Recovery Defies August Trends
Last week’s crypto market recovery defied historical trends, as August is typically a bearish month. Bitcoin’s price gained strength, rising to $65,000 from a significant dip below $50,000, as investors responded positively to the Federal Reserve’s signals for potential interest rate cuts. Altcoins followed suit, with Ethereum (ETH) leading the charge. Notably, Polygon (MATIC), Arbitrum (ARB), and Optimism (OP) saw impressive gains, indicating the potential for an upcoming altcoin season.
Top Reasons to Buy and Hold Polygon, Arbitrum, and Optimism
The upcoming weeks will be crucial for investors, potentially distinguishing those who thrive in the bull market from those who face losses. As we approach the fourth quarter (Q4), historically a bullish period for cryptocurrencies, investors should remain vigilant and strategic. The last quarter of the year often offers opportunities to recover from unrealized losses, similar to the rally that propelled Bitcoin to all-time highs in March 2024, which began in Q4 2023 amid optimism for spot ETF approvals.
In this article, we’ll explore why investors should consider buying and holding Polygon, Arbitrum, and Optimism—three leading Ethereum layer 2 scaling projects. Among these, Polygon is the largest, with a market cap of $4.76 billion, followed by Arbitrum at $2 billion, and Optimism at $1.8 billion.
1. Polygon’s Positive Network Growth and Token Rebrand
Polygon is a top layer 2 Ethereum scaling protocol, currently valued at $0.5132 on CoinGecko after a 22.6% weekly growth. However, due to profit-taking, MATIC has retraced by 4% in the last 24 hours.
Several factors make MATIC an attractive altcoin to buy and hold for potential gains in Q4. A key reason is the upcoming rebrand of MATIC to POL. This new token will initially be used for gas payments and staking, but it will play a crucial role in the AggLayer. According to Polygon’s official blog, the migration is set for September 4.
The transition to POL is expected to make Polygon more appealing to investors, making it a worthy asset to buy and hold. On-chain data from Santiment reveals a significant spike in newly created addresses, rising from just 6 on August 17 to 97 on August 7, indicating growing demand for MATIC.
2. Arbitrum Staking Growth
Arbitrum is another Layer 2 scaling solution for Ethereum, known for its high throughput and low transaction fees. It utilizes Optimistic Rollups, a unique design that ensures security and compatibility with the broader Ethereum ecosystem. Since its inception, Arbitrum has become a popular choice for developers and users seeking faster and more affordable transactions.
The ARB token is currently valued at $0.5915. Despite a slight pullback from $0.6339, ARB has maintained an 11% gain over the past seven days. Investor interest in Arbitrum is growing, as evidenced by the spike in its decentralized finance (DeFi) market’s total value locked (TVL) to $2.83 billion from $2.4 billion in early August, according to Defi Llama. An increase in TVL reduces potential selling pressure, allowing the ARB price to rally further.
3. Optimism’s Soaring Profitability
Optimism is a Layer 2 scaling solution for Ethereum that accelerates transaction speeds while reducing network fees. It is highly valued for its compatibility with the Ethereum ecosystem, allowing developers to easily port their decentralized applications. Optimism stands out for its emphasis on security and decentralization, making it a trusted choice for developers and users alike.
Like MATIC and ARB, OP has shown a bullish trend, climbing to $1.63 by the end of last week. Although the token fell to $1 in early August amid a broader market crash, the latest surge has seen at least 88% of the total Optimism supply turn profitable, according to IntoTheBlock on-chain data.
The In/Out of the Money Around Price (IOMAP) model shows that OP is sitting on strong support at $1.33, where approximately 61,000 addresses bought 483 million OP. This indicates confidence in the token’s potential to rise further, making OP a strong candidate for buying and holding.
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