MATIC, the token behind Ethereum’s leading layer 2 protocols, Polygon is in the red mid-through this week’s trading. The ninth-largest cryptocurrency with a market cap of $11.9 billion has lost nearly 8% of its value in 24 hours to exchange hands at $1.37 at the time of writing.
Polygon price must uphold support at $1.30 to protect investor confidence in the uptrend that started at the beginning of the year. Otherwise, bulls would have no option but to resolve to seek support at $1.20.
Nevertheless, some investors would be willing to buy slightly lower-priced MATIC tokens following a rebound from $1.30 or $1.20 depending on how the market moves in the coming sessions.
Arkham Adds Support for Polygon
Arkham, an on-chain analytics platform has announced support for Polygon. This development will see investors access blockchain data, especially on the activities of addresses and entities.
Investors use such data to understand how network activity influences price movement in the market. Traders can also monitor how large-volume investors or otherwise called whales react to or impact price action.
(2) Polygon on Twitter: “Arkham provides information on the real world entities and individuals behind crypto market activity through associating wallet addresses with actual institutions and individuals. In other words, users can see what large funds or prominent people are doing in real time ✅ https://t.co/a2lzB07jKS” / Twitter
According to Polygon, this support by Arkham will allow users to analyze labeled entities and investigate transaction-level data as well as related historical data. Arkham also monitors the inflow and outflow of funds in MATIC markets and products.
Other key features on the analytics platform include the provision of data on counterparty relationships and the ability for users to set alerts for specific on-chain activities.
(2) Polygon on Twitter: “With this launch, Arkham will allow users to: 📊 Analyze labeled entities 🔎 Examine transaction-level data & historical data ✅ Observe flows of funds 🤝 See counterparty relationships ⏰ Set alerts for any on-chain activity #onPolygon https://t.co/1ZW3Ve5hyT” / Twitter
Polygon Price Screams Sell – Here Are The Levels To Watch
MATIC price is in the red in the wake of rejection from its 2023 high of $1.57. Traders may be forced to change tactics this week, especially with a sell signal from the Moving Average Convergence Divergence (MACD) likely to determine the direction Polygon price will take.
As overhead pressure mounts, the MACD line in blue will validate the pessimistic outlook for the layer 2 blockchain protocol as it crosses below the signal line in red. Furthermore, investors looking forward to betting on short positions in MATIC could gain confidence in ongoing pullback as long as the momentum indicator slides toward the mean line at 0.00 and probably grinds into the negative region. The presence of red histograms beneath the mean line would also reinforce lingering losses.
From the above chart, we can highlight the rising dotted trend line as the first tentative support in line to absorb the ongoing buildup of overhead pressure. Here, bulls will have the first chance to push for the resumption of the uptrend.
If declines increase and Polygon overshoots the trend line, investors would start to acclimatize to MATIC dropping to test the next seller congestion at $1.20. With the 50-day Exponential Moving Average (EMA) holding slightly below this level, it would be challenging for sellers to push through.
Therefore, traders looking forward to new long positions in Polygon could start placing orders as the token bounces off $1.20 – highlighted by the lower yellow band. Remember, this pullback is unlikely to be prolonged, considering MATIC price confirmed a golden cross pattern toward the end of January.
Moreover, these declines are spread across the market as reflected by a 1.7% dip in the total capitalization to $1.15 trillion. Bitcoin has lost 2% of its value in 24 hours and is doddering at $24,123 at the time of writing. Ethereum has not been spared, as it flaunts a 1.8% loss in the same period to $1,647.
The general outlook of the market has everything to do with MATIC giving back the gains. Pullbacks are necessary for up-trending markets because they allow sidelined investors to join the market and create the momentum needed to keep the rally going.
If support at $1.30 weakens, investors should not panic-sell because the IOMAP model by IntoTheBlock shows a solid support buyer congestion zone between $1.21 and $1.25. Approximately 10.33k addresses previously purchased 998.31 million MATIC in that range. Investors in this cohort are experiencing unrealized profit and would be willing to back a trend reversal as opposed to selling.
On the upside, Polygon price faces significantly weak resistance levels, as shown by the small red circles on the chart. With a minor push to the upside, the odds will flip in favor of another bullish breakout.
A break above $1.40 could quickly propel Polygon price to the next significant resistance at $1.60. From here, $2.00 would be well within reach ahead of fresh momentum as FOMO kicks in for gains toward $5.00.
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