Polygon hit the level that last triggered a 275% increase in MATIC value – will history repeat itself?

Polygon hit the level that last triggered a 275% increase in MATIC value – will history repeat itself?

The May 10 Polygon (MATIC) price reversed after testing $ 0.794 as interim support, thus increasing from 25% to 0.99.

The rally comes a day after tokens fell more than 17% to 7 0.787 in a global market crash led by aggressive policy by the US Federal Reserve, its lowest level since July 2021.

MATIC prices rose again after a five-day relentless fall, with buyers at the same support level as before the 275% rally last year.

Weekly chart of MATIC / USD. Source: Tradingview

The previous retest of the 7 0.787 level in July 2021 and the 0.786 Fib line of the Fibonacci retracement chart (close to $ 0.61) – pulled from a low of $ 0.002 to a high of 2.86 – then MATIC rose to a record of $ 1 in December 2021.

Therefore, MATIC / USD may experience similar and sharp bullish pullbacks after rebounding from the same intersection of support in the coming weeks.

MATIC Basic: Then and now

However, between July 2021 and May 2022 there have been many changes in terms of market fundamentals, which may affect the behavior of MATIC traders.

For example, last year the MATIC price boom occurred when demand for Tier 2 solutions increased due to the cost of skyrocketing gas and Ethereum transactions.

As a result, popular decentralized finance (DeFI) apps, including the decentralized exchange SushiSwap (SUSHI), liquidity service curve (CRV), and lending platform Aave (AAVE), have expanded their operations into the polygon chain.

The total amount locked in the polygon’s liquidity pool. Source: Daffy Lama

But 2022 was a bad year for cryptocurrency. The Fed’s decision to raise interest rates, after closing its $ 9 trillion balance sheet, has prompted investors to reduce their exposure to risky assets. Unfortunately, the prospect of excess cash flow from the market has hurt MATIC, whose year-to-date returns were almost 65% below zero as of May 10.

“It’s a risk in all asset classes, including crypto,” Daniel Ives, a strategist at Wadebush Securities, told the Financial Times, adding that digital assets have “nowhere to hide from investors.” He added:

“Some investors are playing crypto as a hedge against inflation, but they are trading like Nasdaq’s Siamese Twin.”

In the face of hope in chaos: goals

May 9, Polygon CEO Ryan Watt Announcement Which is partnering with Meta to create a non-funky token (NFT) platform for Facebook and Instagram.

Meta CEO Mark Zuckerberg also confirmed that they are “testing the digital collection for manufacturers and collectors to show NFT on Instagram”, adding that similar features will be coming to Facebook soon. Hype can help MATIC create a strong value floor.

Huge.

– Michael Van de Pope (CryptoMichNL) May 9, 2022

But from a technical point of view, MATIC risks continuing bearish at $ 0.615 in May.

Weekly chart of MATIC / USD. Source: Tradingview

Meanwhile, a bullish confirmation is unlikely to appear if the token near $ 1.37 as support does not rebound from its 50-week index moving average (50-week EMA; red wave).

The opinions and opinions expressed herein do not necessarily reflect the views of the author and not necessarily those of Cointelegraph.com. Every investment and trading step involves risk, so you should do your own research when making decisions.

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