Polygon’s (MATIC) price broke out from a long-term descending resistance trend line that existed since the December 2021 all-time high.
The price has also reached the top of a long-term horizontal range. Will it break out or get rejected?
The weekly time frame technical analysis shows that MATIC has increased since June 2022. After creating a higher low in October 2023, it accelerated its rate of increase.
Last week, the MATIC price broke out from a descending resistance trend line that had existed for nearly 800 days. More specifically, the trend line had been in place since the all-time high of December 2021. Previously, the MATIC price had made several unsuccessful breakout attempts (red icons).
The weekly Relative Strength Index (RSI) gives a bullish sign. Market traders use the RSI as a momentum indicator to identify overbought or oversold conditions and to decide whether to accumulate or sell an asset.
Readings above 50 and an upward trend indicate that bulls still have an advantage, whereas readings below 50 suggest the opposite. The indicator bounced at 50 while the price broke out, legitimizing the breakout.
CryptoBusy believes MATIC will increase to $3 because of a cup and handle pattern.
NFT Cryptomaniac has the same belief.
“Nothing new here! I’ll let you know if anything changes, otherwise you just close your eyes and open it at $1.80-$1.90-$2.00 depending on the fomo.” He stated
Next, Don Of Charts suggested the MATIC price will reach the next resistance at $1 soon.
The analysis from the 3-day time frame also gives a bullish reading, supporting the weekly one. This is because of the price action, wave count, and RSI readings.
The price action shows that MATIC is approaching the top of a long-term range (white) at $1. The range has existed since July 2022.
The wave count suggests a breakout will transpire. Technical analysts utilize the Elliott Wave theory to ascertain the trend’s direction by studying recurring long-term price patterns and investor psychology. The most likely count indicates that MATIC is in wave three of a five-wave upward movement.
Finally, the 3-day RSI supports the breakout since it recently crossed over 30.
Giving waves one and three a 1:1 ratio will lead to a high of $1.55, 55% above the current MATIC price. If wave three extends to 1.61 times the length of wave one, it can reach $2.05, an increase of 110% from the current price.
Despite this bullish MATIC price prediction, a rejection from the range high can trigger a 30% drop to the middle of the range at $0.70.