Polygon (MATIC) has taken a break from its prevailing bearish trend with one of the sharpest bounces in the cryptocurrency market this week.
Notably, the price of MATIC surged to $0.50 on June 23, four days after hitting $0.317, its lowest level since April 2021. the same period.
However, MATIC is still well below its December 2021 high of $2.92, coinciding with the general cryptocurrency bear market and the Fed’s hawkish pressure on high-risk assets.
MATIC “in a fairly large cluster”
Meanwhile, some of its richest investors are hoarding MATIC tokens despite the overall downtrend, network data shows.
It is noteworthy that, according to data provided by Santiment, the so-called sharks and MATIC whales accumulated. This includes levels of Polygon token holders ranging from 10,000 to 10 million coins, who have “cumulatively added 8.7% more to their bags” since May 9th.
$MATIC sharks and whales have been in a fairly large accumulation trend for about six weeks. Holder levels between 10 and 10 million coins combined added 8.7% more to their bags over that time span. https://t.co/oasCn72rxt pic.twitter.com/lm4au2fWkn
— Sentiment (@santimentfeed) June 22, 2022
Interestingly, the price of MATIC has fallen by 50% over the same period, indicating that many whales are confident in its long-term recovery.
Reversed head and shoulders
From a technical standpoint, MATIC/USD is moving towards a new multi-week high.
The Polygon token has been breaking out of its “inverted head and shoulders” or IH&S pattern since June 22. the general line of support is called the “neckline”.
In addition, the middle depression of the IH&S (head) is deeper than the other two, called the right and left shoulder, respectively. The setup is eventually resolved after the price breaks the neckline and, as a rule of technical analysis, rises a distance equal to the distance between the head and the neckline.
As a result of the IH&S model, the price of MATIC could rise to $0.60 in June or early July, about 20% more than today.
Caution for bulls MATIC
Buying whales is not necessarily a bullish signal, and the IH&S pattern has failure rate 16.5%. As such, a further price rally could also encourage whales to flip MATIC for quick profits, given tough conditions in other crypto and traditional markets that could lead to false recovery signals.
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In addition, MATIC’s balance across all cryptocurrency exchanges jumped from 1.21 billion to 1.37 billion between May 1 and June 23. data from CryptoQuant, indicating additional potential selling pressure in the near future.
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Credit : cointelegraph.com