MATIC price prepares for a quick run-up as it arrives at a significant support level. A resurgence of bulls will add credence and a tailwind to this outlook and propel Polygon higher.
MATIC price prepares for a takeoff
MATIC price has been trading inside the $0.745 to $2.47 range since it was first formed in May 2021. After a sweep below the range low at $0.745 in July 2021, the altcoin rallied a whopping 370% to set a new all-time high at $2.92 in December 2021, when most cryptocurrencies were crumbling from selling pressure.
However, things have not been smooth sailing for MATIC’s price since the all-time high. Polygon has crashed roughly 72% and is currently hovering around $1.13 after creating a swing low at $0.745.
Interestingly, this swing low was right around the $1.01 support level, which led to the formation of a double bottom. This technical formation indicates that a trend reversal favoring the bulls awaits the altcoin.
Hence, investors can expect MATIC’s price to rally to the first hurdle at $1.61 or the 50% Fibonacci retracement level. While this move constitutes a 45%, it is not without headwinds. This rally might face selling pressure around the $1.32 hurdle.
While unlikely, clearing the $1.61 resistance barrier could further multiply the buying pressure and extend the run-up to the range high at $2.47, bringing the total gain to 122% from the current position at $1.14.
Source: TradingView, MATIC/USDT 2-day chart
While the supply on exchanges does not exactly support this bullish outlook, it warns investors of the bearish outlook. A spike in this indicator suggests that investors are looking to offload their tokens.
However, a decline would indicate that these buyers are likely waiting for the price to move higher, which is a bullish outlook.
For MATIC price, the number of tokens held on exchanges saw a massive spike from 748 million to 1.19 billion since January 2022. This 53% surge reveals that investors might be looking to potentially sell their holdings. Therefore, the upswing could face a premature stop at $1.61.
Source: Santiment
Regardless of the optimism, the supply on exchanges brings out the contrasting opinion for bulls. Moreover, a two-day candlestick close below the range low at $0.745 will invalidate the bullish thesis and potentially crash the Layer-2 token to $0.467.
