Polygon's MATIC Eyes $1 Level After Recent Breakout: Chart Analysts
The recent advance in layer 2 scaling solution Polygon's MATIC token has raised the scope for a continued rally to $1, the level last seen two months ago. That's the message from technical analysts studying price chart patterns to gauge an asset's future moves.
MATIC jumped over 12% to almost $0.90 last week, establishing a firm foothold above the widely-tracked 200-day simple moving average (SMA), a barometer of a long-term trend, according to data sourced from charting platform TradingView. Price crossing above the 200-day SMA represents a positive shift in momentum.
The 12th largest cryptocurrency also topped the "Ichimokou cloud" – a collection of lines displaying momentum and trend in one view.
Analysts consider crossovers above or below the cloud as early signs of a bullish or bearish trend change.
"Polygon has cleared daily cloud resistance and the 200- day MA in a short-term bullish development," Katie Stockton, founder and managing partner at the technical analysis research firm Fairlead Strategies, said in an email.
"The breakout reflects positive short-term momentum, which should fuel follow-through, targeting the next resistance near $1.00. If that level is cleared, the secondary resistance is near $1.31." Stockton added.
MATIC breaks two-month downtrend
MATIC recently broke above a trendline connecting the August and September highs, confirming a bullish breakout.
"MATIC has made a very bullish move, getting above the downtrend since August, something that's not been seen yet in bitcoin and ether," Mark L. Newton, CMT, head of technical strategy at FS Insight, said in a market update published on Oct 20.
"This is a bullish move and anything above $0.86 likely gets us up to $0.95, if not $1.05," Newton added.
MATIC's convincing move above the descending trendline is in stark contrast to the dull price action in market leaders bitcoin and ether. Both cryptocurrencies are yet to clear their respective bearish trendlines.
According to Fairlead's Stockton, bitcoin (BTC) needs to see two consecutive daily closes (UTC) above the 50-day SMA at $19,576 to confirm a short-term bullish bias.