‘Pretty significant’ MATIC accumulation causes the price of Polygon to increase by 60% in four days

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As it experiences an inverse head and shoulders breakout, MATIC pricing now anticipates a 20% price increase.

With one of the strongest recoveries this week in the cryptocurrency market, Polygon (MATIC) broke from its current downward trend.

Notably, on June 23, four days after reaching $0.317, its lowest point since April 2021, MATIC’s price increased to $0.50. This is a gain of about 60%, outperforming even the performances of Bitcoin (BTC) and Ether (ETH) within the same period.

Source: TradingView

However, despite the overall crypto bear market and the pressure from a hawkish Fed on risk-on assets, MATIC was still down considerably from its peak of $2.92 in December 2021.

In a really huge accumulation, MATIC

On-chain data indicates that despite the broader slump, some of its wealthiest investors have been accumulating MATIC tokens.

Notably, the information provided by Santiment indicates that the so-called MATIC whales and sharks have been accumulating. This covers the tiers of Polygon token owners who have “together added 8.7% more to their bags” since May 9 and range in value from 10,000 to 10 million coins.

It’s interesting to note that MATIC’s price has dropped by 50% throughout this time, highlighting that many whales are optimistic about its long-term recovery.

Head and shoulders in reverse

MATIC/USD seems to be on its way to a new multi-week high.

In particular, since June 22, the Polygon token has been erupting from its “inverse head and shoulders,” or IH&S design. IH&S, a bullish reversal setup, appears when the price develops three consecutive troughs while dangling upside down from the “neckline,” a frequent support line.

Additionally, the middle trough of an IH&S, known as the head, is deeper than the right and left shoulders. As a general rule of technical analysis, the setup concludes when the price breaks above the neckline and increases by equal to the separation between the head and the neckline.

Source: TradingView

MATIC’s price could rise toward $0.60 in June or early July, up around 20% from today, due to its IH&S pattern.

MATIC bulls: use caution

While purchasing is not always a bullish indicator, the IH&S pattern has a 16.5 percent failure rate. Therefore, given the tight conditions elsewhere in the cryptocurrency and traditional markets that could produce misleading recovery signals, a further price gain could potentially motivate whales to sell MATIC for a quick profit.

 Source: CryptoQuant

Additionally, data from CryptoQuant shows that between May 1 and June 23, the MATIC balance across all cryptocurrency exchanges increased from 1.21 billion to 1.37 billion, signaling probable future sell-pressure.

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