- MATIC price is shaping the handle of a cup-with-handle base.
- Polygon extreme overbought condition on the daily and weekly Relative Strength Indexes (RSI) has been removed.
- Governing mission is to transform Ethereum into a multi-chain ecosystem.
MATIC price is currently positioned at the apex of the cryptocurrency complex, despite a plunge of 75% in May. The extraordinary rebound of 230% from the May low and the developing cup-with-handle base has positioned Polygon with the relative strength and price structure to reach a new high in the coming days.
Polygon provides an easy-to-use platform for Ethereum scaling and infrastructure development
On the back of collective advance in alt-coins, MATIC price has catapulted Polygon into the top 20 cryptocurrencies based on market capitalization. The source of the rapid rise is the successful transformation of Ethereum’s scalability issues and high gas fees into a multi-chain ecosystem with secured Layer 2 chains and standalone chains.
The Layer 2 term describes blockchain solutions that enable applications to scale by managing transactions off the Ethereum Layer 1 while at the same time maximizing the mainnet’s dynamic and decentralized security framework.
The success of Polygon persuaded Mark Cuban to invest an undisclosed amount of money. The Mark Cuban Companies website describes Polygon as “the first sell structured, easy-to-use platform for ethereum scaling and infrastructure development.”
To date, Polygon’s scaling solutions have been met with universal adoption by more than 250 decentralized applications and almost 8 million unique users, covering gaming, virtual reality and cryptocurrency exchanges.
For now, Polygon is not focused on ringing the cash register as users pay fees to validators for transactions, not Polygon. In the future, the blockchain startup will entertain building products on the network for revenue, but for now, the principal objective is growing the network and continuing the disruption.
MATIC price to continue consolidation with an eye on new highs
Until the May 19 collective collapse in the crypto market, MATIC price displayed superior relative strength following a decisive breakout from a multi-week consolidation. The Polygon breakout was accompanied by a notable surge in volume and generated overbought daily weekly RSI conditions.
The May 19-23 period shattered MATIC price strength, taking it down 75% from the high before identifying support at the tactically important 50-day simple moving average (SMA) at $0.791, but above the 2021 rising trend line at $0.645.
As a leader should do, MATIC price rebounded 230% from the May 23 low, quickly setting the foundation for the developing cup-with-handle base. The base evolution has been constructive, with the right side of the cup showing above-average volume and the handle being accompanied by lighter volume, signifying that most of the weak holders have been evacuated.
The base has a precise trigger price at $2.48, the high of the handle, so the key is for investors to wait for the handle to complete. Based on the cup’s compressed right side, the handle needs to extend a few more days before MATIC price breaks out.
The measured move target of the cup-with-handle base of $8.40, yielding a 230% gain from the handle for patient investors.
In the measured move target path is the topside trendline running from the March high through the May high at $4.10, returning a gain of 65% from the handle high. The next targets are the 138.2% Fibonacci extension of the May correction and 161.8% extension at $4.98 and $6.90.
MATIC/USD daily chart
Of course, keen Polygon investors could be confronted by renewed selling in the cryptocurrency complex, disrupting the bullish evolution of the current base. Levels of support include the 50% retracement of the rally from the May 23 low at $1.35, the 61.8% retracement at $1.17 and the 50-day SMA at $1.06.
For a long-term outlook, MATIC price should be bolstered by the rapid adoption of Polygon as a blockchain network with built-in scaling solutions for projects, as well as the integration of Polygon assets into Google Cloud’s BigQuery and the bold investment of Mark Cuban. This makes it a formidable digital asset for anyone compelled to take the bearish side.