MATIC price is contemplating a retracement after it failed to conquer a resistance barrier. This downswing will serve as a break for the bulls, allowing the sidelined investors to jump on the bandwagon and kick-start a new leg-up.
MATIC's price rallied 33% as it retraced to $1.272 on August 18. While this upswing was impressive, it failed to slice through the $1.726 resistance level, leading to a consolidation that will likely evolve into a retracement.
The $1.435 stable support barrier is likely to absorb the selling pressure, allowing for the start of a new uptrend.
Although unlikely, in some cases, Polygon might form a double bottom around the August 18 swing low at $1.272. Investors can expect a new rally to begin at $1.435 or $1.272.
The resistance level at $1.726 will be the first barrier the bulls need to shatter to indicate a new rally’s start. Following a breach of $1.726, MATIC price will retest $1.892, roughly 32% upswing from $1.435.
IntoTheBlock’s Global In/Out of the Money (GIOM) model shows that MATIC price could not cross a resistance cluster ranging from $1.54 to $1.69. Here, roughly 13,800 addresses purchased 54.89 million MATIC tokens.
The inability of the buyers seems to have caused this short-term retracement.
However, this index also shows that the nearly 18,200 addresses purchased 130.5 million tokens at an average price of $1.47, which will serve as a strong support level for restarting an uptrend.
Interestingly, this level approximately coincides with the area mentioned above.
While a retracement seems inevitable, new investors joining the Polygon network appear to be on an uptrend. Over the past month, the number of new addresses increased from 2,200 to nearly 3,000.
This 36% increase indicates that market participants are interested in MATIC at the current price levels, which serves as a proxy to the inflow of capital, which paints a bullish picture.
While things seem to be looking up for MATIC price, a breakdown of $1.435 will indicate a weakness among buyers. If the bulls fail to set up a base around the August 18 swing low at $1.272, the upswing will be in jeopardy.
However, a breakdown of the $1.248 support barrier will invalidate the bullish thesis. This move will open the path for further downswing to $1.136.
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