Polygon (MATIC) establishes ascending channel pattern, expects 30% increase on new ATH

Polygon (MATIC) is expected to increase by at least 30% after a major upgrade on Jan. 18 and take a significant portion of the token out of circulation.

EIP-1559, originally proposed as part of London’s August 5th Ethereum hard fork upgrade, aims to burn off some of the fees paid to the miners at ETH.

Traders and investors increased their bids on Ether before and after the EIP-1559 upgrade, finding that it turned ETH into a deflationary asset for the first time in history. Developed by Justin Drake, EIP-1559 will potentially cut 1.6 million ETH per year, reducing the annual supply rate by 1.4%.

MATIC is looking for new all-time highs

Polygon, which acts as a Layer 2 protocol designed to address the ubiquitous scalability problems of Ethereum, launched EIP-1559 on December 14, 2021. After Testnet launched, the MATIC price rose nearly 30% to 2 .35 USD and hit an all-time high (ATH.). ) almost $ 3 in a short period of time.

MATIC / USD daily frame price chart | Source: TradingView

In theory, lower supply coupled with increased demand should make the asset more valuable.

This classic economic benchmark has historically helped drive demand for cryptocurrencies like Bitcoin (BTC), the issue of which is halved every four years along with a supply cap of 21 million. This begs the question, can MATIC price recover in the same way?

Mineplex co-founder Alexander Mamasidikov says yes. He said that EIP-1559 will have a positive effect on the MATIC price, adding that it could easily go up to new ATH values ​​right after upgrading.

“Often times, in times of price recovery, investors look to both the technical and the fundamental traits to support the coin, and Polygon appreciates both.

While Polygon is still a better version of Ethereum due to its lower transaction costs, it is also a delight for retail investors due to its currently low price compared to Ethereum or other blockchains.

What do MATIC’s technical indicators say?

MATIC has been trending up within an ascending channel pattern since July 2021, confirmed by at least two reactive highs and two reactive lows.

MATIC recently retested the channel’s lower trendline at around $ 1.89 for support, a move that was followed by a retracement to the upside towards $ 2.50. It is currently acting as a resistance and $ 2.50 is also near the 1.00 Fib line.

The daily MATIC / USD frame chart shows an ascending channel pattern | Source: TradingView

That being said, MATIC could try to break the $ 2.44 resistance around the EIP-1559 upgrade on Jan 18th to test its temporary upside target near $ 3, i.e. a rally around $ 3.30.

If the EIP-1559 factor comes into play longer than expected, MATIC price could even attempt a longer rally towards the 1,618 Fib line of around $ 3.52. Conversely, a rejection at $ 2.44 could cause MATIC to retest the ascending channel support line for a bearish breakout, with the risk of invalidating the bullish setup and correcting toward $ 1.77 or less.

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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

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