Polygon (MATIC) Price Analysis: Breakout, Resistance, and Market Dynamics

Polygon (MATIC) Price Analysis: Breakout, Resistance, and Market Dynamics

Crypto News – On September 29, the price of Polygon’s native token, MATIC, broke free from a long-standing descending resistance trendline. Despite this breakout, the price is still trading below the critical $0.60 horizontal resistance level. Recent significant staking activities by FTX and Alameda, totaling almost $10 million in Matic, have sparked curiosity regarding how this might influence the token’s price trajectory.

Failed Sustenance of MATIC Breakout

Analyzing the daily timeframe, technical analysis reveals that MATIC’s price successfully broke free from a descending resistance trendline on September 29. This trendline had been a dominant factor since MATIC’s yearly peak at $1.57 on February 18. However, despite breaching this trendline, the price failed to reclaim the $0.60 horizontal area. Notably, the price encountered rejection at this level on October 5 (indicated by a red icon), subsequently retracing to pre-breakout levels. Currently, MATIC is trading near its yearly low at $0.49.

In a recent development, the estate linked to the distressed FTX exchange engaged in staking activities involving 5.5 million SOL through Figment, securing a 6.99% Annual Percentage Yield. The estate, possessing nearly 56 million SOL, saw 42 million SOL being held by Alameda, effectively locked. A specific cold storage wallet that initially held around 7 million SOL now retains 1.4 million SOL. In addition to SOL, wallets associated with Alameda and FTX have staked 16.7 million MATIC tokens, amounting to a substantial $9.6 million.

MATIC Price Prediction: The Sustainability of the Breakout

In the realm of market trading, the Relative Strength Index (RSI) serves as a valuable momentum indicator, aiding in the identification of overbought or oversold conditions. This information guides traders in deciding whether to accumulate or sell an asset. RSI readings above 50, coupled with an upward trend, signify the prevailing advantage of bulls. Conversely, readings below 50 suggest the opposite.

Analyzing the daily RSI, a notable bullish divergence was observed before MATIC’s price breakout (indicated by the green line). A bullish divergence manifests when a momentum increase coincides with a price decrease, often signaling potential bullish trend reversals, as seen in MATIC’s case.

Despite failing to surmount the $0.60 resistance subsequent to the breakout, the divergence’s trendline remains intact. If MATIC manages to conclusively close above the $0.60 resistance zone, it could potentially propel the price upwards by 60% towards the subsequent resistance level at $0.85.

However, it’s imperative to acknowledge that a failure to breach the $0.60 mark would nullify the preceding breakout. In such a scenario, a projected 36% decline towards the $0.33 horizontal support area is a plausible future price outlook.