Polygon reaches the level that last started 275% MATIC price increase - will history repeat itself?

Polygon reaches the level that last started 275% MATIC price increase – will history repeat itself? – Mail Bonus

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Polygon (MATIC) prices turned upside down on May 10 after testing $ 0.794 as interim support, rising up to 25% to $ 0.99.

The upswing took place a day after the symbol fell above 17% to $ 0.787, the lowest level since July 2021, amid a global market collapse led by the US Federal Reserve.

MATIC prices picked up after going through five days of relentless cuts, attracting buyers around the same level of support as before the 275% bull run last year.

MATIC / USD weekly price list. Source: TradingView

A previous $ 0.787 level reassessment in July 2021 and a 0.786 Fib line (close to $ 0.61) on the Fibonacci retracement chart – subtracted from the $ 0.002 swing low to a 2.86 swing high – followed by the MATIC rise in record high of $ 3 for December 2021.

As a result, MATIC / USD could face a similar, sharp reversal in the coming weeks after recovering from the same support rally.

Fundamentals of MATIC: Then and Now

However, much has changed in terms of market fundamentals between July 2021 and May 2022 that may affect the behavior of MATIC traders.

For example, there was a price hike in MATIC last year as demand for layer-2 solutions increased due to the skyrocketing gas and trading costs of Ethereum.

As a result, popular distributed financial applications (DeFI), including SushiSwap (SUSHI), Curve (CRV) and Aave’s lending platform, expanded their operations in the Polygon chain.

Total value locked inside Polygon liquidity pots. Source: Defi Llama

But 2022 has been a bad year for cryptocurrencies. The central bank’s decision to raise interest rates following the liquidation of its $ 9 trillion balance sheet has led investors to reduce their risk against riskier assets. Unfortunately, the probability of excess cash leaving the market has hurt MATIC, but the paper yield so far was almost 65% below zero on 10 May.

Unfortunately, the probability of excess cash leaving the market has hurt MATIC, but the paper yield so far was almost 65% below zero on 10 May.

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Related: 10-month BTC price cut triggers $ 1B liquidation as Bitcoin looks at $ 35K CME futures range

“This is a risk for all asset classes, including cryptocurrencies,” Daniel Ives, a strategist at Wedbush Securities, told the Financial Times, adding that investors in digital assets have “nowhere to hide.” He added:

“Some investors are playing cryptocurrencies like inflation protection, but it’s in business like the Nasdaq twin.”

Silver lining amid chaos: Meta

On May 9, Polygon CEO Ryan Watt announced that they are partnering with Meta to create a non-usable platform (NFT) for Facebook and Instagram.

Mark Zuckerberg, CEO of Meta, also confirmed that they were “testing digital collectibles for authors and collectors to show NFT on Instagram,” adding that similar features would be coming to Facebook soon. The group could help MATIC form a strong price floor.

But from a technical point of view, there is a risk that MATIC will continue to move towards $ 0.615 in May.

MATIC / USD weekly price list. Source: TradingView

At the same time, a bullish confirmation does not appear unless the symbol regains its 50-week exponential moving average (50-week EMA; red wave) close to $ 1.37 in support.

The views and opinions expressed herein are those of the authors only and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading business involves risk, you should conduct your own research when making a decision.