The MATIC price has exploded 35% higher on huge volume after Polygon finally broke free from the crippling grip of a triangle pattern.
Polygon is trading at $0.8826, up $0.1989 (+29.10%).
It’s been a long time coming, but at last, the MATIC price cleared the restrictive downtrend that has capped it since the May high.
Only Tuesday, I stated, “MATIC heads towards its biggest test yet”. For now, Polygon appears to be passing with flying colours. Although, despite the hardest work being done, challenges remain.
Yesterday’s rally added more than $1b to Polygon’s value, increasing its market cap to $5.5 billion and lifting it three places to the rank of the 20th-largest cryptocurrency. Although welcome news for the bulls, Polygon is still some way off May’s peak $15 billion total value.
So, does this confirm the MATIC price is on the right path to a sustainable recovery?
Polygon price forecast
The daily chart highlights several key developments.
Firstly, Tuesday’s sell-off reversed from the support of a long term uptrend in place from February, at $0.6200. Furthermore, after penetrating the 200-day moving average at $0.6654, MATIC recovered intraday and closed above the important indicator, which is undoubtedly a good sign.
This should be viewed as the catalyst for the latest price action. A massive spike in volume accompanied the rally. Again this is an encouraging sign, suggesting confident buying.
Additionally, the surge helped MATIC advance beyond a restricting downtrend at $0.7861.
Also, the Relative Strength Index (RSI) has turned higher from yesterday’s oversold reading of 24.15 and is currently showing 41.30. Although, notably, the indicator has levelled off this morning.
All the signs point to a classic breakout, and if Polygon remains above the downtrend (now at $0.7556), the outlook is bullish.
However, today, the price has been rejected at the horizontal resistance offered by the previous all-time high of $0.9475, set in April.
In conclusion, whilst developments are encouraging, they are no means conclusive, just yet. Until Polygon climbs above $0.9475, there are concerns that it may retrace yesterday’s move. However, above $0.9475, MATIC should extend to the closely grouped 50 and 100 DMA’s at $1.1854 and $1.1398, respectively.
And should the MATIC price close above those, the bulls will be firmly back in the driving seat.
MATIC piece chart (Daily)
Follow Elliott on Twitter.