Journalist
Posted:
- MATIC has a clear bullish bias, and a retest of $0.95 will likely send the coin higher again.
- Some of the on-chain metrics pointed to the likelihood of increasing selling pressure on the token.
Polygon [MATIC] broke the critically important resistance level of $1 on December 26. It rose to $1.09 and was on a pullback at the time of writing. This was good news for MATIC bulls.
AMBCrypto recently reported that zkEVM network activity declined despite rising TVL. The futures market has reflected robust bullish sentiment in recent days, and that trend could continue if MATIC defends the $0.95-$1 support zone.
The MATIC market structure showed that big gains were imminent
Source: MATIC/USDT on TradingView
The one-day chart has formed higher lows and higher highs after December 23. The token has been trading within a range (purple) stretching from $0.934 to $0.722 since mid-November. So the recent breakout indicated bullish intent.
The OBV was in an uptrend and the RSI was above the neutral 50. Together they showed that the buyers were in control. The Fibonacci retracement levels at $0.9218 and $0.8813 are close to the range high and the former bearish order block.
This zone is now a bullish breaker, a demand zone on the 1-day time frame.
It was also where a fair value gap (white) lay, marking the $0.93-$0.98 region as an area of interest for swing traders. The confluence of several factors outlined a strong buying opportunity targeting $1.17 and $1.3, with the Fib extension moving north.
Weighted sentiment shot up along with prices
Source: Santiment
AMBCrypto noted that despite the strong rally since October, the average coin age has not consistently increased. This suggested that holders were more interested in securing profits than riding the wave.
However, weighted sentiment on social media has been very positive in recent days, likely due to the price action.
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Dormant circulation saw a major spike on December 11, which was a sign of sales pressure. This was followed by a retracement.
Another increase in this metric is something traders can look out for. The MVRV ratio was also near its October high, meaning MATIC was an overvalued asset that holders could book profits on.
Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.