MATIC retested the bull flag’s upper trendline as resistance Friday after its price rose by up to 30%.
Polygon (MATIC) has the potential to reach $3.50 by the end of this year as it charts a pattern that’s starting to resemble a bull flag.
In detail, bull flags are bullish continuation patterns that emerge when the price consolidates following a strong move higher. In doing so, the price tends to trend lower while leaving behind a sequence of higher lows and lower lows.
A breakout occurs when the price closes above the flag’s upper trendline (or resistance). In other words, the price can rise by as much as the height of the previous uptrend, also known as a flagpole.
It appears MATIC has been painting a similar pattern even since it established a record high of $2.89 on May 17, following a $2-long upside run (the flagpole).
As a result, should MATIC’s price break above the flag’s resistance decisively, it will shift its upside target to about $2 above the breakout level. That would roughly put the Polygon token en route to $3.50.
The pullback angle
The bullish setup appeared as MATIC surged by around 30% on Friday to reach a one-month high near $1.65.
Nonetheless, the cryptocurrency experienced a slight correction near the said peak level, dropping by around 4% on profit-taking sentiment among daytraders. Moreover, since the correction occurred right around the bull flag resistance, it raised the possibility of extended selloffs ahead.
Should a pullback happen, it will risk dropping MATIC to its first line of weekly support toward its 20-week exponential moving average (20-week EMA; the green wave) around $1.231. Meanwhile, further weakness could shift the downside target to the 50-week EMA (the velvet wave) around $0.868.
Bulls have the upper hand
In addition to the full flag, MATIC painted a cup-and-handle pattern that presented the possibility of the cryptocurrency hitting $1.80 soon.
Twitterati MK2 Trading spotted the bullish reversal indicator first on the Polygon token’s daily price chart. It showed the price forming a rounding bottom (cup) following an upside move and then painting a descending channel range (handle).
A subsequent breakout from the handle’s trading range would signal a bullish continuation. In doing so, the price would eye a run-up toward the level at a length equal to the cup’s depth. As a result, MK2 Trading expects MATIC at $1.80 in the coming sessions.
Macro fundamentals
The latest bout of buying in the Polygon market appeared after Upbit, one of the leading South Korean crypto exchanges by volume, added MATIC pairs to its trading platform. Additionally, the exchange also listed Solana (SOL) and NuCypher (NU) pairs.
Solana was another standout performer on Friday, with its native token, SOL, surging by over 11.5%, while NuCypher’s NU rallied by more than 845% Friday after Upbit’s announcement.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
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