Polygon Price Explodes 20%, Head-first into trendline resistance

Summary:

The Polygon Price traded at $2.277, its highest level since June but quickly reversed 7% after meeting significant resistance.

The Polygon Price traded at $2.277, its highest level since June but quickly reversed 7% after meeting significant resistance. Polygon (MATIC) has pulled back to $2.108 (-1.17%). up +86.85% in October and +10,000% year-to-date. Currently, there are 6.783 billion MATIC Tokens in circulation, with a total value of $14.36 Billion, ranking it the 16th-most valuable cryptocurrency behind Chainlink (LINK).

Polygon is making inroads in the Decentralized Finance space. The polygon blockchain currently has Total Value Locked (TVL) assets of $4.98 billion and is the 7th most-popular chain for DeFi projects. However, Polygon is losing ground to rivals Fantom (FTM) and Avalanche (AVAX). Nonetheless, it is benefiting from the second altcoin season of 2021. Like earlier this year, as Bitcoin pulls back from a new high, capital is rotating into altcoins at an alarming pace. As a result, several of the top alts are breaking out to the upside.

This morning, Ethereum has printed a new record of $4,400, lifting the MATIC price higher with it. But despite MATIC’s impressive performance of late, it’s still around 30% below its $2.899 high, set in May. However, if the Polygon price can overcome the overhead resistance, bullish momentum could catapult it above 3.00. But if MATIC falls at this hurdle, a sharp correction could follow.

MATIC Price Forecast

The daily chart shows Polygon reversed after tagging rising trend line resistance at $2.277 this morning. Notably, the Relative Strength Index (RSI) showed 78.8 at the time and signalling overbought conditions. However, the Moving Average Convergence Divergence indicator (MACD) supports further bullish momentum.

Considering the euphoria surrounding altcoins at the moment, MATIC is likely to retest rend resistance in the coming sessions. Successful clearance of $2.277 could trigger a parabolic impulse higher. However, I am concerned that investors are becoming complacent, and prices are starting to look frothy. Therefore, in my opinion, chasing the price higher from here carries considerable risk. This is not to say the MATIC price won’t go higher, but it will be prone to extreme volatility in both directions. On that basis, the price could also drop back to the $1.5000 area. In that event, it would offer a better risk vs reward set-up for a long position.