MATIC price seems to be recuperating quicker than many altcoins after the recent flash crash. The downswing found a stable support level capable of absorbing the incoming selling pressure and reversing the trend. Therefore, market participants can expect Polygon to embark on a quick run-up to significant hurdles.
MATIC’s price shows signs of recovery
MATIC price has rallied roughly 9% after the recent 27% crash to $1.33. This downswing was a result of the Bitcoin price crashing with the financial markets. However, Polygon like many altcoins is quick in its recovery and shows signs of continuing this uptrend.
The immediate resistance barrier at $1.78 is where the upside for Polygon will be capped, signaling a total gain of 33% from $1.33.
Supporting this bullish outlook for Polygon is the 30-day Market Value to Realized Value (MVRV) model. This on-chain index currently hovers at -13.8%, suggesting that the short-term holders of MATIC are panic selling at a loss.
However, any move below -10% is considered as an opportunity zone, since long-term holders tend to accumulate assets here since there is little-to-no risk of a sell-off. Therefore, this index forecasts the probability of Polygon moving higher, aligning with the technical indications.
MVRV Ratio | Source: Santiment
While these two outlooks are bullish, the supply on exchanges metric seals the bullish deal. The number of MATIC tokens held on centralized exchanges has dropped from 1.23 billion to 1.15 billion over the past 2 weeks.
This 6.5% downtrend in assets held on exchanges indicates that investors are not looking to sell anytime soon, thereby removing a massive amount of sell-side pressure and solidifying the bullish outlook for MATIC price.
Supply on exchanges | Source: Santiment
Although the technicals and two on-chain metrics are indicating a bullish outlook, Bitcoin’s influence on MATIC and altcoins in general play a crucial role in determining the directional bias. Therefore, if BTC crashes again, Polygon is likely to face similar consequences. In this scenario, if MATIC price produces a decisive close below $1.33, it will create a lower low and invalidate the bullish thesis.
Such a development would cease the control out of the bulls’ hands and place it with bears, who will drive the altcoin to the next support level at $1.15. Here, sidelined buyers could band together for another attempt at a bull rally.