The Polygon price remains compressed between two opposing trend lines, grappling with the key moving averages. However, despite a lack of bullish momentum, the MATIC token respects the long-term uptrend and the 200-DMA, which is an encouraging sign.
Polygon, the layer-2 scaling solution for Ethereum, surged 200% from the July low to a three-month high of $1.875 in early September. However, since then, the MATIC token has struggled to replicate the same form. The token followed the market lower in the final three weeks of last month as digital assets digested China’s enhanced ban on cryptocurrencies. As a result, Polygon lost almost 50% of its value but found good support on the dip, bouncing 46% from $1.000 to $1.460. However, MATIC has drifted lower in the last week, despite Bitcoin’s run to $58,500. Polygon is currently trading at $1.2500, slap-bang in the middle of the recent range, and not giving away many clues as to which direction it will take next.
The daily chart shows the Polygon price is winding sideways in a narrowing symmetrical triangle pattern. A descending trend line from the May high caps the price at $1.5100. Below the market, a longer-term trend line provides significant support at $0.9400. The two opposing trend lines counter each other, and the sideways price action will continue until Polygon breaks free from their grip.
The major moving averages further confuse the situation. The 50-DMA at $1.310 adds to the upside resistance. However, the 100-DMA at $1.224 and the 200-DMA at $1.142 reinforce the trend support. Considering the rising trend and the longer-term DMA’s offer support, the uptrend is still dominant. As long as MATIC holds the 200-DMA, the outlook is neutral to bullish, and this view remains unless MATIC breaks down. On that basis, a drop below $0.940 invalidates this thesis.
For more market insights, follow Elliott on Twitter.