Crypto News- The current price action of Polygon (MATIC) is showing an interesting development as it attempts to break above a long-term descending resistance line. The outcome of this breakout attempt could significantly influence the direction of its future trend.
Analyzing the Price Pattern of Polygon (MATIC) for Insights into Future Trends
In our analysis on the daily timeframe for MATIC, we can observe that its price has been below a descending resistance line since February 28, when it reached its peak for the year at $1.57. During this decline, MATIC also broke down below the $0.60 support level and confirmed it as resistance on August 29 (indicated by the red icon).
This confirmation coincided with the last touch on the descending resistance line, signaling a bearish trend. However, MATIC has recently shown signs of strength and is currently making an attempt to break above this resistance line. If MATIC succeeds in breaking above this line, there’s a potential for a 60% increase, with a target at the $0.85 resistance level.
Conversely, if it faces rejection once more, a 35% drop to the nearest support level at $0.35 could be expected. It’s worth noting that despite the prevailing bearish sentiment in price action, the daily Relative Strength Index (RSI) is showing signs of a potential shift towards a bullish trend. Traders often use the RSI to assess momentum and make decisions about buying or selling assets. An RSI reading above 50 during an uptrend is generally considered favorable for bulls, while a reading below 50 suggests the opposite.
Although the RSI is currently below 50, it is trending upwards, and more importantly, it has displayed significant bullish divergence (as indicated by the green line). Bullish divergence occurs when an increase in momentum accompanies a decrease in price, and it typically precedes bullish trend reversals. In MATIC’s case, this could potentially lead to a breakout from the long-term descending resistance line.
MATIC Price Prediction: Will Short-Term Breakout Catalyze an Increase?
A closer look at the shorter-term six-hour timeframe provides conflicting signals.
On the bullish side, the price has broken out from a descending wedge pattern that had been in place since the beginning of the month. Such breakouts are typically indicative of a bullish trend and often result in significant price increases.
On the bearish side, the price has fallen below the $0.53 horizontal area instead of confirming it as support. The $0.53 area is of critical importance since it has alternated between serving as both support and resistance since August 21.
Therefore, whether the price manages to reclaim this level or falls below it will be instrumental in determining the future trend. Consequently, the future price prediction for MATIC hinges on whether Polygon successfully reclaims the $0.53 area, as doing so could trigger a breakout from the long-term resistance line and potentially lead to a 60% price increase. However, a rejection could result in a 35% drop.
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