The Polygon price can shoot up after partnership with the NFT platform
Polygon (MATIC) price has regained the horizontal support area of $0.80. While there is a short-term bullish pattern in place, the direction of the long-term trend is unclear.
Polygon is a platform that provides a scaling solution for the Ethereum blockchain. It aims to transform Ethereum into a multi-chain system, thus it can be considered as an internet of blockchains.
What was previously known as the Matic Network was changed to Polygon in February 2021. Like the Ethereum network, it uses proof-of-stake consensus.
The Polygon Prize has reduced below a descending resistance line since December 2021. At that time, it had just reached an all-time high of $2.92. The downward movement ended in June 2022 with a low of $0.31.
The polygon price has since increased. In July, it broke out from the descending resistance line and the horizontal area of $0.80. The area now provides support (green icons). The nearest resistance area is at $1.70.
The weekly RSI is not determined since it is right at the 50 line.
Therefore, if the Polygon price breaks down from the $0.80 area, it could have massive implications for the future price. A breakdown would also cause the RSI to fall below 50, indicating that the price forecast is bearish.
Conversely, a bounce from the $0.80 area could be the catalyst for an upward move towards $1.70.
Polygon price creates double bottom pattern
November 22, Magic Eden, one of the leading NFT marketplaces at Solana announced it would add Polygon as the third blockchain on the platform. MATIC has been moving upwards since, despite a small drop in the last 24 hours.
The six-hour technical analysis shows that the Polygon price created a double bottom pattern (green icons). The second bottom occurred after Polygon broke out from a short-term descending resistance line. However, the pattern was not coupled with bullish divergence in the RSI, reducing its validity.
If the pattern is validated, it could lead to a rise towards the $1.10-$1.20 resistance area. This would complete the C wave of an ABC structure.
Conversely, a drop below the second bottom of $0.76 would invalidate this Polygon price forecast.
Why $0.80 will determine the trend direction
The daily time frame provides some unclear signs, more specifically the daily RSI movement above and below 50.
However, there is one bullish sign in the form of a deviation and a re-claim. Polygon price deviated below the $0.80 area in September 2021 (red circle). It retook the area shortly after. Since then, it has followed an ascending support line.
Therefore, the $0.80 area can be considered a threshold for the direction of the trend. A close below would indicate that the trend is bearish.
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