Polygon commits $100M for “Supernets”, but MATIC token charts a bearish pattern

NEW DELHI (CoinChapter.com) — Polygon’s native token MATIC price jumped 9.6% on Apr 22 to reach a high of $1.5 from the day’s low of $1.37. MATIC crossed above $1.5 for the first time since falling below it on Apr 8.

Friday’s uptrend likely stems from Polygon’s announcement at the Polygon Ignite event in Amsterdam. Polygon shared plans to invest $100 million in “Supernet” chains.

Launched in May 2021, Polygon Edge is a customizable blockchain stack that enables users to build and launch a variety of app-specific blockchains. The network described Supernets as ‘Polygon Edge networks on steroids.’

In detail, Supernets are scalable blockchains that aim to help increase Polygon blockchain adoption. Furthermore, validators for each Supernet would stake MATIC tokens on the mainnet before validating the network.

https://twitter.com/0xPolygon/status/1517502697498316800

Polygon co-founder Mihailo Bjelic pointed out that for Web3 mass adoption, it is vital to combine blockchain’s complexities with scalability and personalization.

Polygon Supernets deliver all this, enabling any project to fast-track their blockchain ambitions and join the growing Polygon multi-chain ecosystem.

Mihailo Bjelic, Co-founder of Polygon, said

Also Read: OneOf expands its sports NFT market with new collection minted on Polygon.

However, MATIC’s price risks a fall of nearly 82.5% from current levels as Polygon painted a bearish technical pattern.

MATIC Price Paints Descending Triangle Pattern

MATIC’s price action led to the token forming a bearish technical pattern called the descending triangle. In detail, a descending trendline connecting swing highs and a horizontal trendline joining swing lows form the pattern.

The height of the triangle’s thickest section determines the price target in a descending triangle setup.

MATIC price risks falling to $0.27, a drop of nearly 82% from current price levels. Traders often look to high trading volumes to confirm a breakdown of the pattern.

MACD Turns Bullish For Polygon

Meanwhile, MATIC’s price jump on Apr 22 led the token to challenge its 50-day moving average (yellow wave), but the moving average rebuffed Polygon’s uptrend. Furthermore, MATIC prices have been moving below a descending trendline since Jan 1 this year.

If bears move to book profits, MATIC price could fall to immediate support near $1.37. A marketwide sell-off could see Polygon fall to support near $1.3, a price level that has supported MATIC price action since Jan 22.

However, Friday saw Polygon’s momentum indicator MACD charted a bullish crossover for the MATIC.

In detail, a bullish crossover occurs when the MACD line (difference of 12-day and 26-day EMA) moves above the MACD signal line (9-day EMA of MACD). As a result, traders usually consider the chart pattern as a buy signal, helping boost the asset’s prices.

Also Read: Polygon (MATIC) paints bearish technical pattern, risks a drop of nearly 52%.

MATIC prices might start an uptrend, taking cues from the bullish crossover and Polygon’s Supernet announcement. The token would need to flip immediate resistance from its 20-day MA (red wave) near $1.44.

A move above immediate resistance would likely see MATIC price challenge resistance from its 50-day MA (yellow wave) near $1.5. Finally, Polygon has resistance near $1.56, a price level that MATIC tested as support between Jan 26 and Feb 20.

At the time of writing, MATIC was trading at $1.409, up 2.32% on the day.