- ETH hit a new ATH in January 2021.
- MATIC surged after ETH entered price discovery.
- ETH’s growth directly impacted Layer 2 tokens like MATIC.
In the previous crypto cycle, Ethereum ($ ETH ) was the driving force behind many altcoin rallies. By early 2021, ETH broke through its all-time high (ATH), entering a price discovery phase. This marked a major turning point for the entire crypto market , including Layer 2 solutions like Polygon ($MATIC).
Before this, MATIC was relatively quiet, trading sideways for much of 2020. Although it had strong fundamentals and growing adoption, it hadn’t yet caught fire. That changed dramatically once ETH broke past its ATH in January 2021.
MATIC Takes Off After ETH’s ATH
As soon as ETH surged, investors started looking for projects that could scale with Ethereum. That’s where MATIC came in. It was already known as one of the most promising Layer 2 scaling solutions for ETH, offering faster and cheaper transactions.
With Ethereum getting more expensive to use due to network congestion and rising gas fees, MATIC became the go-to alternative. This shift in attention sent MATIC skyrocketing. Within weeks, it broke out of its previous range and entered a massive bull run.
The connection was clear: as ETH entered price discovery, MATIC followed closely behind, riding the wave of renewed interest in the Ethereum ecosystem.
The Power of Layer 2 in a Bull Market
MATIC’s 2021 rally shows how Layer 2 tokens can benefit when Layer 1 chains like Ethereum enter bull territory. Investors seek alternatives that offer scalability and speed, and MATIC was well-positioned to meet that demand.
This cycle also highlighted a pattern: when ETH moves, Layer 2s tend to follow. MATIC wasn’t just reacting to ETH’s price—it was riding the growing demand for better infrastructure in a booming market.
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