MATIC Rally Gathers Speed as Meta Announces Polygon-Driven NFTs, Chart Signals Golden Cross
The progress of the scaling system Polygon’s original cryptocurrency MATIC has accelerated in the wake of positive news and bullish chart patterns.
MATIC has rallied 30% in two days, hitting a six-month high of $1.15 on Friday, according to CoinDesk data. The climb has lifted the cryptocurrency’s cumulative gain since the end of June to 270%.
The latest leg higher can be attributed to Web2 giant Meta’s decision to launch a toolkit that allows users of the social media platform Instagram to create and sell polygon-powered non-fungible tokens (NFTs), or digital collectibles. Polygon is the first partner that Meta has chosen for the new feature.
“Creators will soon be able to create their own digital collectibles on Instagram and sell them to fans, both on and off Instagram,” Meta announced Wednesday. “They want an end-to-end toolset – from creation (starting on the Polygon blockchain) and presentation to sales.”
On the same day, investment banking giant JPMorgan conducted its first decentralized financial transaction over Polygon.
MATIC’s rally since then suggests that despite lingering concerns about the global economy, investors are ready to snap up coins with positive fundamentals that promise increased usage.
Investor preference for news-driven trading is also evident from Thursday’s 60% surge in AR, the initial coin of decentralized storage system Arweave after Meta said it would use the Web3 platform to archive digital collectibles.
According to Markus Thielen, head of research and strategy at crypto service provider Matrixport, MATIC’s rally may have legs.
“Polygon’s MATIC could be a long core position here as Meta (Facebook) is serious about luring away TikTok influencers and becoming more active on the Instagram platform,” Thielen said. “Promising to take zero commission on sales – as opposed to Apple’s 30% cut on all NFT sales in the App Store – is a key selling point.”
Meta said it will not charge fees to create or sell NFTs until 2024. However, a 30% sales deduction will apply to the store fees. A long core position refers to a primary long-term effort that satisfies both fundamental and technical research criteria.
“The meta announcement has drawn attention to MATIC and [AR]and traders seem to pair long positions in these coins with short ones [sell] positions in perpetual futures linked to bitcoin,” said Matthew Dibb, CEO and co-founder of Stack Funds.
“Taking US dollar exposure out of the trade seems to be the best thing to do right now,” he said, drawing attention to the rising MATIC-BTC ratio, which has jumped to its highest point since January on Binance .
Golden crossover
The MATIC/USD daily price chart shows that the 50-day simple moving average (SMA) has crossed above the 200-day SMA, confirming what chart analysts call a golden crossover.
The pattern indicates that the recent average price is higher than the long-term average price, a positive signal indicating the development of an uptrend.
MATIC has broken the resistance at $1,055 (August 14 high), after breaking a downtrend last month. The next resistance is set at $1.24, the February 24 low.
Open interest jumps
The dollar amount locked in futures tied to MATIC, also known as open interest, has nearly doubled from $209 million to $415 million in 24 hours, according to data source coinglass.com.
An increased open interest means an influx of new money into the market. A rise in open interest, together with an increase in the price of an underlying asset, is said to confirm an uptrend.
“It’s a sign that traders are building new long positions,” Matrixport’s Thielen wrote in a note to clients.
