Ethereum’s suffering is Polygon and a host of other high throughput platforms that have been sprouting up to serve the ever-expanding and fast-evolving DeFi space.
Polygon Suffering as Ethereum Gas Prices Drop
Polygon promises to scale Ethereum as a side-chain using a blend of several consensus algorithms.
While it does offer a solution, the network is also finding adoption. It currently hosts over 350 projects, becoming one of the most active smart contracting protocols with EVM compatibility.
Their merger of various solutions became hotfixes for projects whose survival depended on low transaction fees.
Ethereum’s congestion problems have subsided.
Transaction fees are at multi-month lows at the time of writing. There is an uncanny relationship between Gas dropping and the valuation of Ethereum-alternatives whose primary selling points were lower Gas.
Polygon Market Performance
MATIC prices are at multi-weekly lows, breaking below the psychological $1 level to spot rates.
Although there appears to be a revival reading from the daily chart, MATIC’s fragility is evident.
As we advance, Polygon fundamentals would play a substantial part in sustaining the uptrend. If not, MATIC prices could dump down in the correction of the present over-valuation.
Technical candlestick arrangement suggests bears.
MATIC/USDT, as aforementioned, is still–despite today’s revival–within a bearish breakout pattern, reversing from around May 2021 lows.
There is a confirmed inverted hammer with a long lower wick indicating bullish momentum in the lower time frames.
Specifically, in the 4HR chart of the MATIC/USDT, there is a bullish engulfing pattern and a three-bar reversal pattern that may be the base, favoring bulls in the short term.
This revival is already helping breed confidence amongst MATIC holders and optimistic bulls.
MATIC to Might break Above the Bull Flag to $2.4
Furthermore, the analyst is specific, highlighting the area between $0.70 and $0.84 as perfect loading zones. Already, reading from the daily price chart, MATIC/USDT is rounding from this zone.
After yesterday’s pin bar marked with an uptick of trading volumes, complete with a bullish engulfing pattern in the 4HR chart, buyers may find relief.
As a result, the arrangement in the daily chart may provide a launchpad for a lift-off above the psychological round number at $1.
The analyst observes that the RSI indicator is at oversold territory, boding well with momentum bull traders who might need this confirmation before committing.
MATIC/BTC: A Contrarian Trade to Play Out
Another trader is also skeptical of the downtrend.
On Trading View, the analyst, Liborbtc, says there have been more than ten consecutive selling bars, an anomaly.
This, he says, is “a lot,” and the best strategy, regardless of what appears to be insurmountable selling pressure, is to HODL. In his view, the best way to assess the potent of MATIC is through staking.
At the time of writing, the spill-out from yesterday’s late NY buying momentum is forming a Morning Star Doji pattern in the daily chart.
In that case, the three-bar bullish reversal pattern emboldens bulls, arresting the downtrend.
A Relief Bounce for Polygon Prices
On YouTube, VisionPulseTrades expects MATIC prices to recover after posting deep losses in the past few days.
However, for a sustained uptrend, MATIC must close above $0.70, rejecting lower lows in smaller time frames.
This will, as mentioned earlier, draw demand, supporting prices as MATIC/USDT bulls target $1 in the short-to-medium term.
Charts courtesy of Trading View
Disclaimer: Opinions expressed are not investment advice. Do your research.
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