Polygon Coin Price Drops to Key Support Amid Signs of Potential Reversal
The Polygon (MATIC) coin recently dipped to its triangle support level, accompanied by signals of oversold conditions from both technical and on-chain metrics. This drop has led to speculation about a potential reversal in the near future.
Seven-Week Downtrend Due to Falling Wedge Pattern
Over the past seven weeks, the Polygon coin has been in a steady downtrend, primarily due to a falling wedge pattern. The two downsloping trendlines of this pattern acted as dynamic resistance and support, resulting in MATIC’s price falling from $1.29 to $0.588—a loss of 54.3%. However, the recent downward momentum stalled at the $0.625 support, hinting at a potential bottom formation amid positive sentiment around Bitcoin’s upcoming halving.
On-Chain Metrics Suggest Undervaluation
For nearly two weeks, Polygon’s price has been consolidating in a narrow range between $0.772 and $0.588. This sideways movement suggests that while positive sentiment has helped stall further declines, there hasn’t been enough momentum to spark a strong recovery.
As of the time of writing, the MATIC price is trading at $0.72 with a 1.22% intraday loss. The rejection at the overhead trendline indicates that the price may retest the lower support, signaling a continuation of the sideways trend. Nevertheless, broader trends suggest that the price is hovering above the support trendline of a two-year-long symmetrical triangle pattern, indicating a significant bottom from which a new recovery cycle could begin, targeting the upper boundary of the triangle.
In addition, a recent analysis by a prominent trader, @alicharts, pointed out that the 30-day, 365-day, and Market Value to Realized Value (MVRV) Z-Score Ratios for Polygon are all in the negative domain. This confluence of indicators is typically viewed as a sign of undervaluation and suggests that a rebound could be on the horizon, marking an optimal entry point for investors.
Technical Indicators Signal Potential Recovery
These technical indicators support the notion of a potential bullish reversal for Polygon:
- Relative Strength Index (RSI): The daily RSI slope rebounded from the oversold region, indicating that buyers are accumulating MATIC at a discounted price.
- Bollinger Bands: The lower boundary of the Bollinger Bands is trending downward, suggesting that the price might need further consolidation before a clear reversal signal emerges.
With these signals in mind, analysts predict that Polygon could be poised for a bullish reversal, setting a potential target at $1.22 in the near future.
