Polygon reaches level that last time triggered a 275% MATIC price rally — will history repeat?

2 years ago

Polygon (MATIC) price reversed people to the upside connected May 10 aft investigating $0.794 arsenic its interim support, frankincense rising by up to 25% to $0.99.

The rebound occurred a time aft the token slumped implicit 17% to scope $0.787, its lowest level since July 2021, amid a global marketplace crash led by the U.S. Federal Reserve's hawkish policies.

MATIC price rebounded aft undergoing 5 days of relentless declines, attracting buyers astir the aforesaid enactment level that had preceded a 275% bull run past year.

A erstwhile retest of the $0.787-level successful July 2021 and the 0.786 Fib enactment (near $0.61) of the Fibonacci retracement graph — drawn from the $0.002-swing debased to 2.86-swing precocious — followed up with MATIC rising to its grounds high of $3 by December 2021.

Therefore, MATIC/USD mightiness acquisition a similar, crisp upside retracement successful the coming weeks aft rebounding from the aforesaid enactment confluence.

MATIC fundamentals: past and now

However, a batch has changed successful presumption of marketplace fundamentals betwixt July 2021 and May 2022 that whitethorn power MATIC traders' behavior.

For instance, MATIC's terms roar occurred past twelvemonth arsenic request for layer-2 solutions accrued owed to Ethereum's skyrocketing state and transaction costs.

As a result, fashionable decentralized concern (DeFI) applications, including decentralized speech SushiSwap (SUSHI), liquidity work Curve (CRV), and lending level Aave (AAVE), expanded their operations successful the Polygon chain.

But 2022 has been a atrocious twelvemonth for cryptos. The Fed's decision to hike involvement rates followed by the unwinding of their $9 trillion equilibrium expanse has prompted investors to trim their exposures to riskier assets. Unfortunately, the imaginable of excess currency leaving the marketplace has wounded MATIC, whose year-to-date insubstantial returns were astir 65% beneath zero arsenic of May 10.

Unfortunately, the imaginable of excess currency leaving the marketplace has wounded MATIC, whose year-to-date insubstantial returns were astir 65% beneath zero arsenic of May 10.

"This is simply a risk-off crossed each plus classes, including crypto,” Daniel Ives, strategist astatine Wedbush Securities, told the Financial Times, adding that integer plus investors person “nowhere to hide.” He added:

"Some investors are playing crypto similar a hedge against inflation, but it’s trading similar the Nasdaq’s Siamese twin."

Silver lining amid chaos: Meta

On May 9, Polygon CEO Ryan Watt announced that they are partnering with Meta to make a nonfungible token (NFT) level for Facebook and Instagram.

Meta CEO Mark Zuckerberg also confirmed that they person been "testing integer collectibles for creators and collectors to showcase NFTs connected Instagram," adding that akin features would travel to Facebook soon. The hype could assistance MATIC signifier a beardown terms floor.

Massive.

— Michaël van de Poppe (@CryptoMichNL) May 9, 2022

But from a method perspective, MATIC risks bearish continuation toward $0.615 successful May.

Meanwhile, a bullish confirmation looks little apt to look unless the token reclaims its 50-week exponential moving mean (50-week EMA; the reddish wave) adjacent $1.37 arsenic support.

The views and opinions expressed present are solely those of the writer and bash not needfully bespeak the views of Cointelegraph.com. Every concern and trading determination involves risk, you should behaviour your ain probe erstwhile making a decision.

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