MATIC needs this for an 85% bullish breakout
Both the MATIC market and the polygon network are making great strides. However, it is known that a successful market relies on participants and that is exactly what Polygon worries about. The question is, can investors correct the mistake from now on, or is it still going downhill?
Polygon create a new record
MATIC did exceptionally well this week, posting an increase of 21.2%. MATIC also gained 26% in just one day on October 15 when it was listed on Upbit.
MATIC 4-hour chart | Source: TradingView
But not only the token, the chain itself is also setting records in the DeFi area. This week, Polygon officially surpassed the Binance Smart Chain (BSC) in the total number of wallets for the first time. At the same time, the 100 million wallet mark was exceeded and a new all-time high was created.
Total number of addresses by string | Source: Coin98
The increase in participation is not diminishing as Polygon continues to have an average of over 330,000 wallets per day.
Number of new addresses in a row | Source: Coin98
The problem, however, is that the increase in participation this time around is purely due to FOMO and / or bull market hype. Participants are not currently conducting any on-chain transactions. If you look at the number of daily transactions on the network, you will find that these are steadily decreasing and are less than 3.4 million transactions per day.
Number of daily transactions | The source: Coin98
What about the spot market?
Even on the spot market, the volume rose for the above-mentioned reason alone. The volume hit $ 2.38 billion in just one day, and over $ 8.5 million in shorts was liquidated.
MATIC spot volume | The source: Coinlyze
Another problem is that MATIC investors are frozen for weeks and only show up when something sensational happens, like yesterday.
This also happened on August 31, 2021 when the number of active addresses skyrocketed simply because the MATIC price increased by almost 20%. It suffers from the same problem as Bitcoin – too many people involved, but very few people take it seriously.
Number of active addresses | Source: Intotheblock
In addition, the network lacks a long-term HODLer, another sign of a lack of seriousness. HODLers who hold assets for 1-12 months dominate the market, making up 77.8% of all addresses.
MATIC address distribution | Source: Intotheblock
But luckily, the network wasn’t bought and sold within days of indifference from short-term owners / traders. MATIC therefore continues to hope to build a solid investor base.
Price check of the key resistor
MATIC may be ready for a new high, but it has to break through resistance first.
After a positive start to the week and rallying nearly 11% to an intraday high of $ 1.62, MATIC has since cooled to $ 1.47.
Despite the substantial gain, she has yet to break through the resistance. The most important hurdle remains the upper trend line of a symmetrical triangle, which has been growing on the daily chart of MATIC since the end of April.
To confirm a bullish breakout of the consolidation pattern, MATIC must close the daily candle above this supply level. If it successfully breaks the $ 1.66 mark, it could rally 85% towards the all-time high of May 18 at $ 2.7.
This bullish price target is determined by measuring the height of the triangle on the y-axis and adding it to the breakout point.
Listing on Upbit could create the buying pressure it takes to climb higher. More audiences with access to asset trading can act as a catalyst for a breakout. However, the bullish outlook is unlikely to be confirmed until a crucial close above $ 1.66.
If that fails, MATIC can drop to the $ 1.30 support. While retesting this level could indicate an important buying zone for market participants, any sign of weakness could result in a sharp correction. The next key area of support is around $ 0.62.
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