Polygon’s MATIC token looks to be on the verge of resuming its upward trajectory, with little to no competition in its way.
After breaking out of a bullish continuation trend, Polygon’s MATIC token is poised to reclaim prior all-time highs.
Before the price of MATIC skyrockets, the company retraces its steps.
On its daily chart, Polygon’s MATIC token has broken out of an inverse head-and-shoulders configuration that has been in place since early July. The cryptocurrency soared by more than 10% to a high of $1.80 after breaking through the pattern’s neckline at $1.63.
At present price levels, an increase in purchasing pressure might drive MATIC’s price up to $2.64, a 46 percent gain. Therefore, the inverted head-and-shoulders broadest range is measured and added upward from the breakout point to arrive at this objective.
While the changes appear to favor the bulls, it’s important to remember that assets that break out of inverted head-and-shoulders patterns tend to retest the neckline or breakout point before moving on. Thus, downturns like this assist shake out some of the market’s “weak hands” and give sidelined investors a chance to re-enter.
In the case of a downswing, the $1.58-$1.63 demand barrier would likely hold Polygon’s pricing in check, according to IntoTheBlock’s In/Out of the Money Around Price (IOMAP) model. Over 8,130 addresses have previously purchased roughly 40 million MATIC at this location.
Given the high degree of interest at the $1.61 support level, token holders are willing to go to any length to save their assets from going bankrupt. They may even buy additional tokens, helping prices to recover and achieve the $2.63 objective set by the head-and-shoulders pattern.
It’s worth mentioning that Polygon would have to overcome a few roadblocks to realize its upside potential. According to the IOMAP cohorts, the most critical supply barrier is $1.70, where 5,380 addresses contain nearly 52 million MATIC.
Once this resistance level is broken, the next major barrier is between $1.83 and $1.88, where 4,000 addresses purchased 3.90 million MATIC.