Key Takeaways:
- Polygon whales are making large transactions as the blockchain platform registered impressive gains in 2023.
- Meanwhile, MATIC price formed a bullish technical pattern with a 276% price target.
NEW DELHI (CoinChapter.com) — Polygon whales have made some large movements in MATIC, as the in-house token of Polygon made significant advances in the new year. MATIC price rose to its highest level since Nov 8 on Jan 29.
The price rally likely resulted from the Polygon whale movement. On Jan 25, analytics platform Santiment noted a Polygon whale transferred 59 million MATIC tokens (worth $56 million at the time) to their wallet. The Polygon token price surged more than 13% on Jan 26 after the transfer.
Whale movements often have a significant impact on an asset’s price action. Traditionally, large transactions going away from exchanges suggest a hodling mentality among investors. Moreover, whale transactions help decrease a token’s circulating supply, helping bolster prices.
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Another Polygon whale, a wallet that first bought the Polygon token when it traded at $0.02, sold over 4.5 million MATIC tokens. The whale sold the Polygon token in exchange for 5.2 million DAI tokens at an average price of $1.14.
The reason behind the sale might be MATIC’s recent price action.
Polygon Paints Bullish Triangle Pattern
Meanwhile, MATIC price formed a bullish technical pattern called the ascending triangle.
In detail, a horizontal trendline that connects swing highs and an ascending trendline connecting swing lows forms an ascending triangle pattern. Volume helps determine if a breakout is strong.
In an ideal world, buyers would enter the market as the trendlines close the gap, pushing prices above horizontal resistance with heavy volumes. Unfortunately, a low-volume breakout on the upside will likely fail, resulting in a pullback.
Per the rules of technical analysis, the price target for a breakout is equal to the triangle’s height at its thickest point. Hence, MATIC price might reach $4.36 after confirming the pattern, jumping 276% from the current level in the process.
MATIC Bulls Ignore Overbought RSI Level
On Jan 29, bulls pushed back against the selling pressure to help MATIC price jump 6.4% to form a daily high of $1.2. However, bears pushed the Polygon token back below $1.2, defending the price level aggressively.
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Furthermore, the relative strength index of MATIC continued to be overbought, with a value of 73.41 on the daily charts. Overbought RSI levels have traditionally preceded bearish trend reversals. As a result, traders consider the pattern a sell signal.
Should MATIC bears continue selling, the Polygon token price might drop to support near $1.13. Moreover, breaching immediate support might cause MATIC price to fall 14% to test the 20-day EMA (red wave) support near $1.
On the other hand, an upside rally might help MATIC price rise to resistance near $1.24. Breaking and holding above immediate resistance could see the Polygon token target resistance near $1.33
