The digital currency Polygon’s native token MATIC has recently made a significant move, breaking away from a descending resistance trend that had contained its price for over two years. Questions now arise whether this breakout signals the beginning of a new bullish cycle or if the token will struggle to maintain its upward trajectory.
Technical Breakthrough for MATIC
Analyses of MATIC on a weekly chart reveal that the price has successfully breached a long-standing resistance line, ending the week at its highest point since April of the current year. 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.
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.