The MATIC price continues to find strong support at the significant 200-day moving average, which underpins the 2021 bull market. As long as this remains the case, Polygon (MATIC) will head higher. However, for the last four days, MATIC has been rejected at $1.3500, leaving it vulnerable.
Polygon, the layer-2 scaling solution for Ethereum (ETH), attracted huge interest at the start of the year as investors flocked to assets with exposure to decentralized finance (DeFi). However, more recently, attention has turned to layer-1 blockchains like Solana (SOL). As a result, the MATIC price has underperformed, and despite holding its uptrend, is 57% below Mays $2.87 all-time high. Nonetheless, holders should be encouraged that Polygon has turned higher from critical support.
The daily chart shows a rising trend line from the July low is supporting the price at $1.060. Furthermore, the 200-day moving average at $1.096 reinforces the trend support, and the 100 DMA at $1.210 offers additional coverage for the bulls. However, Polygon is running into resistance at the 50 DMA at $1.354. As long as the MATIC price stays above the 200 DMA and the rising trend line, the outlook is favourable, and Polygon should soon topple to the 50 DMA. In that event, an extension towards the September high at $1.875 looks probable.
I maintain a confident bullish view above $1.060. However, if MATIC loses the support of the 200 DMA and the rising trend, the outlook turns decidedly bearish, cancelling the positive call.
For more market insights, follow Elliott on Twitter.