Polygon MATIC price analysis: A rally to $1 may be on the cards
Polygon could consolidate in the near term
The cryptocurrency markets jumped along with the US equities markets after the United States Federal Reserve raised rates by 75 basis points on 27 July. Polygon (MATIC) also responded with a sharp rally, and the bulls are attempting to build upon the strength as of 28 July 2022.
Although the crypto markets have been in a bear phase for the past several months, Polygon’s second quarter statistics show no signs of a slowdown. The number of new unique addresses in Q2 2022 increased by 12% over Q1 2022. Similarly, the total average transactions in the second quarter were higher by 4% when compared to the previous quarter. Encouragingly, the average transaction cost slumped by 49% to $0.018.
Polygon unveiled “the first EVM-equivalent ZK L2” on 20 July ”which the company said was “a giant leap forward for Ethereum scaling and ZK innovation.”
Polygon said in a blog post: “You can build on Polygon zkEVM the same way you would on Ethereum. You can deploy any Ethereum smart contract. Any tooling that works with Ethereum will work on Polygon zkEVM. Do anything you would do on Ethereum, for lower cost and at greater speeds, and have it verified on the Ethereum network via a ZK validity proof. It’s Ethereum, but with ZK scalability.”
Will bulls maintain demand at higher levels and break above the overhead resistance? Could Polygon go up? Read the MATIC price analysis to find out.
Polygon price technical analysis: Weekly chart
MATIC’s price climbed above the 20-week exponential moving average (EMA) last week but the bulls could not sustain the higher levels. This suggests that the bears are attempting to stall the recovery at the 20-week EMA.
The bears tried to pull the price down this week but the long tail on the candlestick suggests strong buying at lower levels. The buyers will make one more attempt to clear the overhead hurdle at the 20-week EMA.
If they manage to do that, the MATIC/USD pair could pick up momentum and rise to the 50% Fibonacci retracement level of $1.03 and then to the 61.8% retracement level of $1.20.
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Contrary to this assumption, if the price turns down from the current level, the bears will attempt to sink the pair below $0.71. If they succeed, the pair could slide to $0.62.
Polygon price technical analysis: Daily chart
MATIC’s price rebounded off the breakout level of $0.75 on 26 July, indicating strong buying on dips. The 20-day EMA is sloping up and the relative strength index (RSI) is in the positive territory indicating advantage to buyers.
The bulls will now attempt to push the price to the psychological level of $1, where the bears may again mount a strong defence. A break and close above this level could indicate the resumption of the uptrend.
On the other hand, if the price turns down from the current level or $1, the pair may drop to $0.75. A bounce off this level could keep the pair range-bound for a few days.
The bears will have to sink and sustain the price below $0.75 to weaken the positive momentum. The pair could then decline to the 50-day simple moving average (SMA).
Polygon: Buy or sell this week?
Polygon is facing resistance at $0.90, but if bulls do not give up much ground, the rally could reach $1. The bears are expected to mount a strong defence at this level. If that happens, Polygon's price analysis suggests that the pair may remain stuck between $0.75 and $1 for a few days.
The views and opinions expressed in the article are those of the author and do not constitute trading advice. Trading and investing involve substantial risks and you should do your own research or contact your financial adviser before arriving at a decision.