Polygon (MATIC) has experienced significant price corrections over the past few months, leading to a sharp decline in its market capitalization. However, the token has recently shown signs of a bullish recovery, which is partly driven by the current market conditions and anticipation of a major upgrade.
According to data from CoinMarketCap, MATIC’s price dropped by over 17% in the last 30 days, with only 3% of Polygon addresses being in profit. However, in the last 24 hours, MATIC’s price surged by more than 5%, trading at $0.4421 with a market cap exceeding $4 billion, ranking it as the 21st largest cryptocurrency.
ZAYK Charts, a well-known crypto analyst, recently highlighted a falling wedge pattern that appeared on MATIC’s chart in late 2023. This pattern, often considered a bullish indicator, has seen MATIC’s price consolidating within it. At the time of analysis, MATIC was on the brink of breaking out of this pattern, which could potentially lead to a 100% price increase, bringing MATIC’s value close to $1.
Despite the potential for recovery, on-chain data from Santiment reveals that investor activity around MATIC has been relatively subdued. The supply of MATIC on exchanges and outside of exchanges has remained closely aligned, indicating limited movement by investors. Additionally, the supply held by top addresses has stayed flat, suggesting that whales are not making significant moves.
However, there is a silver lining as the Market Value to Realized Value (MVRV) ratio has improved, signaling a potential bullish trend. This improvement, along with the anticipation of a major upgrade, could drive positive sentiment around MATIC.
Upcoming Upgrade: Migration to POL
Polygon is set to undergo a significant upgrade on September 4th, which involves migrating MATIC to a new token, POL. This upgrade is expected to bring several new benefits, including using POL as a gas token within the Polygon ecosystem. The upgrade aims to enhance the functionality, security, and efficiency of the Polygon PoS network by providing consistent transaction fees and reducing user friction.
Short-Term Price Prediction
Technical indicators on MATIC’s daily chart suggest a potential for further price increases. The Bollinger Bands indicate that MATIC has already broken above its 20-day simple moving average (SMA) resistance, while the Chaikin Money Flow (CMF) has registered an uptick, hinting at continued upward momentum. However, the Money Flow Index (MFI) appears bearish as it trends downwards, which could suggest caution in the short term.
Overall, while MATIC has faced challenges, the upcoming upgrade and current market dynamics could pave the way for a strong recovery, potentially leading to significant price gains in the near future.
