Polygon’s native token, MATIC, has recently broken through a significant resistance level that had held it back for over two years, sparking speculation about a potential new bullish cycle. This technical breakthrough has caught the attention of traders and investors alike, as MATIC ended the week at its highest point since April. While the token experienced a minor pullback, it appears to have established the former resistance as new support, a promising sign for future price action. However, MATIC still faces a major horizontal resistance zone that has been a critical level since mid-2021. Will this breakout mark the beginning of a sustained upward trend?
Technical Breakthrough for MATIC
Analyzing MATIC on a weekly chart reveals that the price has successfully breached a long-standing resistance line, ending the week at its highest point since April of the current year. This breakout is significant as it marks the end of a descending resistance trend that had contained MATIC’s price for over two years. Although MATIC experienced a minor pullback after this surge, recent activities suggest it has affirmed the former resistance as new support, a pattern commonly observed in the cryptocurrency market following such breakouts.
Despite this break, MATIC has yet to clear a major horizontal resistance zone that’s been fluctuating as both a ceiling and floor since mid-2021. The daily chart, which includes various technical indicators, echoes the possibility of an upward trend continuation. The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) indicators both suggest bullish momentum, further supporting the case for a continued upward trajectory.
MATIC’s On-Chain Signals
The on-chain metrics appear to support a bullish outlook for MATIC, showing a break above the previous high of $0.95 and establishing it as a support level. With a bullish divergence noted in the daily Relative Strength Index (RSI), a commonly bullish signal, and wave counting techniques predicting an ascent above the $1 mark, the positive sentiment is palpable. The Elliott Wave Theory, employed by analysts to forecast market trends, suggests that MATIC could be in the third of a five-wave upward sequence. If this pattern holds true, MATIC’s price could soar by 60%, reaching as high as $1.55.
However, a decline below the $0.95 support could signal a peak within the current structure, potentially leading to a 25% decline toward the next support level at $0.74. This makes the $0.95 level a critical point to watch for traders and investors.
Market Sentiment and Future Projections
The broader market sentiment also plays a crucial role in MATIC’s price action. The cryptocurrency market has been experiencing a mix of bullish and bearish trends, with Bitcoin and Ethereum often setting the tone for altcoins like MATIC. The recent bullish breakout in MATIC could attract more traders and investors, potentially driving the price higher.
Moreover, the Polygon ecosystem has been gaining significant attention due to its technological advancements and partnerships. The introduction of new features and collaborations with major players in the blockchain space could further bolster MATIC’s price. For instance, the recent announcement of the POL token, a next-generation hyperproductive token designed to power the Layer-2 blockchain ecosystem via a re-staking protocol, has generated considerable hype and could positively impact MATIC’s price.
Technical Indicators and Price Analysis
Relative Strength Index (RSI)
The RSI is a momentum oscillator that measures the speed and change of price movements. It oscillates between 0 and 100 and is typically used to identify overbought or oversold conditions in a market. An RSI above 70 is considered overbought, while an RSI below 30 is considered oversold. In the case of MATIC, the RSI has shown a bullish divergence, indicating that the price could continue to rise.
Moving Average Convergence Divergence (MACD)
The MACD is a trend-following momentum indicator that shows the relationship between two moving averages of a security’s price. The MACD is calculated by subtracting the 26-period Exponential Moving Average (EMA) from the 12-period EMA. A nine-day EMA of the MACD, called the "signal line," is then plotted on top of the MACD line, which can function as a trigger for buy and sell signals. For MATIC, the MACD has displayed a positive price action, suggesting ongoing bullish momentum.
Elliott Wave Theory
The Elliott Wave Theory is a form of technical analysis that traders use to analyze financial market cycles and forecast market trends by identifying extremes in investor psychology, highs and lows in prices, and other collective factors. According to this theory, MATIC could be in the third wave of a five-wave upward sequence, which is typically the strongest and most powerful wave in the Elliott Wave cycle. This suggests that MATIC’s price could see significant gains if this pattern holds true.
Potential Risks and Challenges
While the technical indicators and on-chain metrics paint a bullish picture for MATIC, it’s essential to consider potential risks and challenges. The cryptocurrency market is highly volatile, and external factors such as regulatory changes, macroeconomic trends, and market sentiment can significantly impact prices. Additionally, the major horizontal resistance zone that has been a critical level since mid-2021 could pose a significant challenge for MATIC’s price to break through.
Moreover, the broader market sentiment and the performance of major cryptocurrencies like Bitcoin and Ethereum can influence MATIC’s price action. If the overall market experiences a downturn, it could negatively impact MATIC’s price, regardless of its technical indicators and on-chain metrics.
Conclusion
Polygon’s native token, MATIC, has made a significant move by breaking through a long-standing resistance level, sparking speculation about a potential new bullish cycle. The technical indicators and on-chain metrics support a bullish outlook, with the possibility of MATIC’s price reaching as high as $1.55 if the current trend continues. However, traders and investors should remain cautious and consider potential risks and challenges, including the major horizontal resistance zone and broader market sentiment.
As the Polygon ecosystem continues to grow and attract attention, the future looks promising for MATIC. The introduction of new features and partnerships, such as the POL token, could further bolster MATIC’s price and solidify its position in the cryptocurrency market. For now, all eyes are on MATIC as it navigates through critical resistance levels and aims for new highs.
The post first appeared on BH NEWS: Polygon’s MATIC Surpasses Key Resistance Mark
