According to analyst Yashu Gola, the polygon price risks a 50% drop as the popular altcoin MATIC marks an inverted cup and handle pattern. The downtrend technical setup has a 62% success rate in meeting downside price targets. Details are on Kriptokoin.com.
“This altcoin could drop hard”
Polygon (MATIC) is down more than 40% from its record high of $2.92 on Dec. 27, 2021. However, if a classic technical indicator is to be believed, the token has a chance of further declines in the coming sessions. MATIC’s recent bullish to bearish transition, followed by an upward rebound, has resulted in what appears to be an inverted cup and handle pattern. In a “perfect” scenario, inverted cup and handle setups set the stage for a future setback. Therefore, if MATIC breaks the downtrend from the “handle” range, i.e. a drop accompanied by an increase in volumes, it could drop to $0.86 in the future, about 50% below its current prices.
Polygon’s extreme bearish outlook emerged amid a broader crypto market correction in 2022. Polygon’s market cap fell from $18.10 billion to $12.96 billion, and MATIC’s price per token fell over 30% to $1,734 over the same period. However, a combination of technical support has kept the token’s bullish hopes alive. In detail, MATIC’s 200-day exponential moving average and two support levels in the form of a multi-month upslope trendline helped MATIC to contain the bearish trend.
However, an upside pullback seems likely to cause MATIC to retest a close resistance level in the form of a negatively sloped trendline. As a result, the bullish pattern can only emerge if there is a decisive recovery, i.e. an increase in trading volumes as well as prices. Otherwise, MATIC will risk verifying the inverted cup and handle model, which has a 62% success rate according to veteran analyst Tom Bulkowski. So, according to data provided by PolygonScan.com, Polygon’s daily active addresses (DAA) average around 300,000 per day compared to 759 at the start of 2021. Analysts at Panther Research considered a rising DAA bullish for MATIC, citing Ethereum, whose rising DAA is linked to a rise in ETH prices.
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