MATIC Bulls Aim to Burst Polygon (MATIC) Out of the Falling Wedge Pattern

Crypto bears have taken Polygon (MATIC), a popular Layer-2 alternative cryptocurrency, for a wild roller coaster ride, resulting in a 23.5% drop over the past 30 days.

Crypto bears have put Polygon (MATIC) through the wringer, causing a 23.5% drop over the last 30 days. In fact, Polygon’s long-term price target of $1 was last seen on April 1, 2024.

However, the Layer-2 altcoin is now facing strong resistance at $0.50. This resistance level acted as a major catalyst for MATIC throughout September and October in 2023, helping the token eventually bounce back above $1.

Last Friday, Polygon dropped to yearly lows at $0.43. It then took two days for MATIC to regain momentum and spark above $0.50, but the resistance line once again rejected the token due to trading volume not catching up with the northbound trajectory on Sunday and the following Monday morning.

However, the #24 cryptocurrency by market cap once again retested the $0.50 price barrier on July 9, 2024, as MATIC hovered above the checkmark for the majority of the day. As shown in Nina Trader’s post on X, bolstered by activity in Derivatives markets, Polygon is looking to break out of the falling wedge geometrical pattern.

Polygon’s Network Activity Tops BTC & ETH

As demand for Polygon in Derivatives markets returns, cryptocurrency traders have generated $369 million in daily trading volume this Tuesday. Boosting this metric by 30.30% over the last 24 hours, MATIC also saw an increase in Open Interest (OI), which measures the density of unsettled leveraged positions across Derivatives markets.

Although the overall sentiment around Polygon gives an upper hand to the crypto bears, the renewed interest in the token is boding well for a price trend reversal. Binance’s clients are the most bullish on MATIC, showing a bullish long versus short position ratio at 3.2052. This means that long MATIC positions outscore short-sellers threefold.

The overall long versus short ratio is 0.92 at press time in the 24-hour period, signaling that traders lack belief in the coin, as they tend to place more money on short-selling leveraged plays. In a broader perspective, the rising volumes on both Derivative and Spot markets suggest that investors are coming back to Polygon’s chain, but a rebound rally is yet to come.

According to Mihailo Blejica, one of Polygon’s co-founding members, the Layer-2 chain’s active crypto addresses on July 8, 2024, outpaced both leading blockchains, Bitcoin and Ether. Polygon’s active addresses stood at 1.18M, while BTC and ETH recorded 594K and 365K active on-chain addresses during the same time frame.

While this bodes well for the falling wedge pattern to produce a breakout, other key on-chain factors shall be taken into consideration. First off, Polygon’s (MATIC) Chaikin Money Flow (CMF) dwelled slightly above zero, flashing 0.15 at press time. Indicating a refreshed money stream into the token, the CMF index is yet to boost MATIC’s market value or the Relative Strength Index (RSI), which remained neutral on both 4-hour and 1-hour technical charts.

On the Flipside

Why This Matters

Technical patterns can help assess the shifting crypto market dynamics without the consideration of social sentiment.

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