Monday, January 24, 2022

Polygon eyes record high as MATIC’s 150% price rally activates textbook bullish pattern

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A latest value rally out there of Polygon’s native MATIC token pushed its costs above $1.56 for the primary time in additional than two months.

The MATIC/USDT alternate price rose 20.65% in simply two days to reclaim its June 17 excessive. Merchants raised their bids for the pair after Polygon introduced that it would create a decentralized autonomous organization (DAO) for its neighborhood members whereas focusing particularly on the booming decentralized finance (DeFi) area.

Polygon, which affords layer-two scaling options for Ethereum initiatives, allotted $100 million for the DAO creation — and likewise to bring DeFi projects into its interoperability pool. The workforce additionally introduced that it will airdrop new DAO governance tokens to current Polygon customers — i.e., free tokens for individuals who maintain MATIC.

The stable interim fundamentals have pushed MATIC demand larger amongst speculators, resulting in a value rally over the previous two days. In the meantime, the upside transfer additionally activated a traditional bullish setup that would ship MATIC costs to a brand new document excessive.

Breakout awaited

Dubbed “inverse head and shoulders,” the sample is a standard bullish reversal indicator that seems after the value makes three troughs in a row under a resistance-like neckline. In doing so, the center trough (head) seems to be deeper than the opposite two (shoulders), that are roughly of equal peak when measured from the neckline.

Technical chartists usually enter a long position when the value strikes above the neckline, with the sample’s most peak plus the breakout stage serving as their final revenue goal. Their cease loss is often at the low level of the best shoulder.

Making use of the textbook definitions on the MATIC/USDT three-day chart reveals the pair forming an inverse head and shoulders sample.

Polygon (MATIC/USDT) three-day chart with the inverse head and shoulders setup. Supply: TradingView

On Aug. 20, Polygon’s token inched above the neckline resistance of $1.51 following a 150% value rally measured from the June 18 low of $0.62 (the pinnacle). Subsequently, the utmost peak of the inverse head and shoulders sample got here out to be $0.89.

Associated: Terra Virtua moves to Polygon blockchain, citing environmental concerns

In consequence, ought to the MATIC/USDT rate break above $1.51, accompanied by a spike in buying and selling quantity, the pair will enhance its chance of rising $0.89. In doing so, it will eye $2.40 as its inverse head and shoulders revenue goal, simply $0.30 under its present document excessive.

Bearish setup

If MATIC bulls fail to reclaim $1.51 as help, its value may retreat again to the following line of help close to $1.35.

MATIC/USDT 3-day candle chart. Supply: TradingView

A further breakdown would expose MATIC/USDT to $1.09, a dependable help stage in latest historical past.

The views and opinions expressed listed here are solely these of the writer and don’t essentially replicate the views of Cointelegraph. Each funding and buying and selling transfer includes danger, and you need to conduct your personal analysis when making a call.