MATIC’s price pictured a three-month-old bullish setup breaking out. The current technical formation has a high conviction rate and is likely to play out, pushing the altcoin to the forecasted levels.
MATIC’s price might need a breather
MATIC’s price action from 13 December 2021 to 16 March 2022 set up four lower highs and three lower lows. Connecting these swing points using two trendlines reveals a falling wedge in formation.
This technical pattern favors the bulls and the breakout is often explosive since the price gets squeezed during the formation. The target for this pattern is obtained by adding the distance between the first swing and swing low to the breakout point at $1.42.
On 16 March, MATIC’s price squeeze ended as it broke out of the falling wedge, forecasting a 36% ascent to $1.95. Making this breakout interesting and adding a tailwind is the daily demand zone, extending from $1.15 to $1.36. Since the breakout, the crypto has rallied by 28% and at press time, was hovering above the $1.64-support level.
Going forward, MATIC’s price could undergo a minor retracement that retests the $1.64 barrier before embarking on its uptrend. The bulls are likely to retest the target at $1.95, but in some cases, the rally might extend to the $2-psychological level. Such a move would push the total gains from 36% to 48%.
The local top formed here will be a high conviction swing point and will lead to consolidation or a pullback to the immediate support levels.
Who let the whales out?
Supporting the bullishness derived from the falling wedge pattern for MATIC’s price is the recent uptick in the number of large transactions. This on-chain metric, sometimes termed whale transaction count, is an index that tracks the number of transfers worth $100,000 or more.
A sudden spike in this metric suggests that whales or high networth investors are interested in the price of the underlying asset. If this uptick occurs after a massive rally, it often refers to these holders selling their holdings.
However, a spike in this index at the bottom could coincide with accumulation. For MATIC, this on-chain metric has been on an uptrend from 35 to 85 over the last two weeks.
Regardless of the bullishness seen with MATIC’s price and the indicators, if BTC flips the narrative, altcoins will suffer a bearish fate. In such a situation, if MATIC produces a decisive close below $1.15, it will invalidate the bullish thesis and open the path for further descent.