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Polygon’s MATIC Flashes Eerily Bearish Pattern Following 227% Price Rally

Polygon’s MATIC Flashes Eerily Bearish Pattern Following 227% Price Rally
Image by Janko Ferlic from Pixabay

Yerevan (CoinChapter.com) — MATIC, the native token of the Polygon scalability platform, exhibits signs of forming a Double Top pattern following its spectacular 227 percent rally since May 8.

Technical Analysis

Double Top pattern, the bearish counterpart of the Double Bottom, typically forms a letter “M” through its price moves. It consists of two consecutive rounded tops — they don’t have to have the same peak. The second top, as a result, appears slightly lower than the first one. It shows a weakening bullish momentum bear a certain peak level, which grants the entire pattern the name of Double Top.

MATIC in a possible bearish Double Top pattern. Source: MATICUSD on TradingView.com
MATIC in a possible bearish Double Top pattern. Source: MATICUSD on TradingView.com

The MATIC daily chart matches the technical description so far. The first top stood at approximately $2.42 margin, only to drop back to $1.05 (black support line on the chart) with the rest of the market, following the infamous May 19 crash.

However, the token managed to log a shocking 110 percent gain from May 23 to 27, declining again afterward. The double top pattern suggests MATIC could drop back to the $1.05 margin in the upcoming sessions. Meanwhile, the token traded at $1.80 in the London session Friday.

The double top is often used with other indicators that can back up the suggested trend. However, the token’s 20-day exponential moving average (EMA-20: blue wave on the chart above) exhibits a quite strong bullish trend. Despite the recent turbulence, it is still safely above the 50-day moving average (MA-50: red wave). MATIC might continue to decline until it hits the EMA-20 but then rebound from it, using the indicator as additional support.

Read more: Will The MATIC Price Recover Before Bitcoin And Ethereum Can?

There are also bullish expectations from experts, using the Fibonacci Retracement Pattern to predict the price in the upcoming sessions. The trajectory could go either way, as none of the patterns indicated are strong enough by themselves.

What drives MATIC?

Polygon platform found a new investor in billionaire Mark Cuban, the NBA Dallas Mavericks owner and a fresh face in the crypto community. The size of his investment in MATIC is undisclosed. However, his website Lazy.com will also integrate Polygon.

The billionaire investor’s trust in Polygon definitely gave MATIC traders more incentive to go in and buy the token. Moreover, the total value locked in the platform’s liquidity pools jumped by 16 percent on May 26. Apparently, liquidity providers anticipated higher yields from the Polygon staking programs.

Read more: 3 Reasons Why Polygon’s MATIC Could Retest Its All-Time High

The future trajectory of MATIC is not definite. The token could follow the Double Top pattern and drop back to the $1.05 margin in the upcoming sessions. However, Polygon bulls could take over and drive the token to new highs. Either way, traders will definitely have the answer within the weekend.

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Lilit Chichyan

Lilit is an enthusiastic writer, skilled in 3 languages, and interested in writing about the tech world, trading, art, and science. She also has a background in psychology and marketing, which helps deliver the right message to the target audience. Lilit is creative and fast and has the experience of writing for both big marketing companies and small websites and blogs.

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