- MATIC could see a double-digit rally, according to analyst Ali Martinez.
- However, it may face headwinds in the short term.
Polygon [MATIC] will face a 17% surge if it breaks above its parallel channel, crypto analyst Ali Martinez has noted in a after on X (formerly Twitter).
When assessing the movements of the L2 token on a 4-hour chart, Martinez found that the price has consolidated within a range since early April to form the parallel channel pattern.
This pattern occurs when an asset’s price action remains contained between two trend lines, indicating a period of consolidation.
MATIC may not be ready
At the time of writing, MATIC was exchanging hands at $0.72 and trending towards the top line of its parallel channel.
When an asset moves towards the upper trendline of a parallel channel, it is interpreted as an attempt to test resistance.
If that position does not hold and a breakout occurs, the asset in question could reach new price highs.
However, AMBCrypto found that MATIC’s rally above this resistance level could be challenging in the short term.
This is because the price of the token is significantly close to the 20-day Exponential Moving Average (EMA).
When the price of an asset fluctuates around this moving average, it indicates indecisiveness in the market, with neither buyers nor sellers able to establish dominance.
To achieve a break above resistance there must be a strong increase in buying pressure, giving the bulls clear market control.
However, with MATIC’s MACD line (blue) falling below the signal line (orange), bear power could increase.
When an asset’s MACD line tries to dip below its signal line, it is typically interpreted as a bearish signal. It indicates weakening upward momentum and a shift to a downtrend.
Source: MATIC/USDT on TradingView
A good place to buy?
MATIC’s market value to realized value (MVRV) ratio, as assessed by a 365-day moving average, has given a buy signal.
According to Santiments data, the value of this statistic at the time of writing was -12.58%. The metric measures the ratio between the current market price of MATIC and the average price of each acquired token.
Source: Santiment
Read Polygon [MATIC] Price forecast 2024-2025
When it returns a negative value like this, MATIC is considered undervalued, as its market value is lower than the average purchase price of all its tokens in circulation.
It is seen as a buy signal because traders see it as an opportunity to purchase the token at a discount compared to its historical cost basis.