Polygon’s MATIC token breaks out with a target of $2.60

The central theses

• MATIC ist in den letzten zwei Tagen um mehr als 14 % gefallen.
• Der Abschwung könnte Teil einer Bärenfalle sein.
• Die technische Analyse weist auf einen bevorstehenden Ausbruch von 62 % hin.

Polygon’s MATIC token is preparing to revisit previous all-time highs after breaking out of a bullish continuation pattern.

MATIC retraces before rising

Polygon's MATIC token has broken out of an inverse head and shoulders formation that has been developing on its daily chart since early July. After breaking above the pattern's neckline at $1.63, the altcoin rose by more than 10% to hit a high of $1.80.

A further increase in buying pressure around the current price level could push the price of MATIC another 46% towards $2.64. This target is determined by measuring the widest span of the inverted head and shoulders and adding that distance upward from the breakout point.

While the odds appear to be in the bulls' favor, it is important to note that assets that break out of inverse head and shoulders patterns tend to retest the neckline or breakout point before advancing further. Such downturns help shake out some of the so-called “weak hands” and provide an opportunity for delinquent investors to re-enter the market.

IntoTheBlock's In/Out of the Money Around Price (IOMAP) model shows that in the event of a downturn, the demand limit of $1.58 to $1.63 would likely keep Polygon's prices in check. Here, over 8,130 addresses have bought almost 40 million MATIC so far.

With significant interest around the $1.61 support level, token holders would likely do everything they can to prevent their investments from going out of the money. They could even buy more tokens that would allow prices to recover and reach the head-and-shoulders target of $2.63.

MATIC – In / aus dem Geld um den Preis

It's worth noting that there are some obstacles that Polygon would have to overcome to reach its upside potential. Based on the IOMAP cohorts, the key supply barrier is at $1.70, with 5,380 addresses holding around 52 million MATIC.

Once this resistance level is broken, the next critical wall is between $1.83 and $1.88 as 4,000 addresses purchased 3.90 million MATIC around this price point.