Polygon Price on Track for 30% Increase If MATIC Breaks the 700-Day Resistance Level at $0.75
Can Polygon Break Out Above $0.75? | Credit: Derek Fenech
Key Takeaways
- The Polygon (MATIC) price trades above long-term support but below long-term resistance.
- The long- and short-term time frames provide mixed readings.
- Can MATIC break out above resistance, or will it fall below support instead?
While a number of Ethereum Betas and Layer-2 solutions are increasing because of renewed optimism regarding the Ethereum ETF, the opposite has happened with MATIC. The price has struggled to sustain any sort of an upward movement and trades only 25% above its April highs.
Despite this show of weakness, MATIC attempts to break out from a long-term resistance area. Will it be successful, and if yes, how long will it continue increasing afterward?
MATIC Trades Between Support and Resistance
The MATIC price has increased alongside an ascending support trend line since June 2022. The trend line has been validated thrice, most recently in April 2024 (green icon), creating a long lower wick. The trend line has existed for over 700 days.
Besides the trend line, the most important level is at $0.75. This is a horizontal area that has periodically acted as resistance and support side by side with the trend line.
The area turned to resistance once the Poylgon price broke down below in April. Since then, MATIC has made numerous unsuccessful breakout attempts (red circle).
Despite the breakout attempts, the MACD and RSI both give bearish readings. More accurately, the RSI fell below 50 and the MACD below 0, both signs of a bearish trend.
Can MATIC Regain Its Footing?
The daily time frame Polygon price chart gives mixed readings. The price action shows that MATIC broke out from a descending resistance trend line (white).
However, the breakout has been contained inside an ascending parallel channel, which usually happens in corrective structures. Also, MATIC trades well below the 0.382 Fibonacci retracement resistance level, which is the first resistance after a breakout.
Despite the lack of strength, technical indicators give a bullish outlook. This is clear by the bullish divergences that have developed in both the RSI and MACD (green), often preceding a bullish trend reversal.
Finally, the wave count supports the possibility of an increase. The increase since April 13 was contained inside an ascending wedge and is likely a leading diagonal. In the bigger picture, it is either wave A of an A-B-C structure (white), or wave one in a five-wave increase (yellow).
If it is a corrective structure (white), MATIC can reached the $0.86 resistance before decreasing. On the other hand, if the Polygon upward movement is a five-wave increase, the MATIC price will reach the 0.618 Fibonacci retracement resistance at $1.02 before correcting.
MATIC Price Faces Critical Resistance at $0.75
The Polygon price chart gives mixed readings because of its inability to maintain an increase above the $0.75 area. The short-term wave count suggests the price will break out initially, but the long-term trend remains unclear.
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