MATIC price prepares for a quick run-up as it arrives at a significant support level. A resurgence of bulls will add credence and a tailwind to this outlook and propel Polygon higher.
MATIC price prepares for a takeoff
MATIC price has been trading inside the $0.745 to $2.47 range since it was first formed in May 2021. After a sweep below the range low at $0.745 in July 2021, the altcoin rallied a whopping 370% to set a new all-time high at $2.92 in December 2021, when most cryptocurrencies were crumbling from selling pressure.
However, things have not been smooth sailing for MATIC’s price since the all-time high. Polygon has crashed roughly 72% and is currently hovering around $1.13 after creating a swing low at $0.745.
Interestingly, this swing low was right around the $1.01 support level, which led to the formation of a double bottom. This technical formation indicates that a trend reversal favoring the bulls awaits the altcoin.
Hence, investors can expect MATIC’s price to rally to the first hurdle at $1.61 or the 50% Fibonacci retracement level. While this move constitutes a 45%, it is not without headwinds. This rally might face selling pressure around the $1.32 hurdle.
While unlikely, clearing the $1.61 resistance barrier could further multiply the buying pressure and extend the run-up to the range high at $2.47, bringing the total gain to 122% from the current position at $1.14.
Source: TradingView, MATIC/USDT 2-day chart
While the supply on exchanges does not exactly support this bullish outlook, it warns investors of the bearish outlook. A spike in this indicator suggests that investors are looking to offload their tokens.
However, a decline would indicate that these buyers are likely waiting for the price to move higher, which is a bullish outlook.
For MATIC price, the number of tokens held on exchanges saw a massive spike from 748 million to 1.19 billion since January 2022. This 53% surge reveals that investors might be looking to potentially sell their holdings. Therefore, the upswing could face a premature stop at $1.61.
Source: Santiment
Regardless of the optimism, the supply on exchanges brings out the contrasting opinion for bulls. Moreover, a two-day candlestick close below the range low at $0.745 will invalidate the bullish thesis and potentially crash the Layer-2 token to $0.467.
Manisha is a News Editor at AMBCrypto. With a Master’s degree focused on Mass Communication, Manisha is good at multitasking with an eye for detail. She is fascinated by new, emerging technologies and her interests lie in the regulatory implications of such tech.
