- Polygon extends recovery to erase August losses
- However, key hurdles can be found at $0.51 and $0.55.
Polygon (MATIC) has been among the five outliers on the daily and weekly price charts. Since last Friday, MATIC has increased by nearly 20%, while the rest of the market has remained sideways.
But that’s not all, as in what is now a new update, Polygon will be changing its native token from “MATIC” to “POL” on September 4th. The swap ratio will be 1:1 for MATIC to POL. According to the Polygon team, the transition aims to make POL the ecosystem’s gas and staking token. It could be expanded to meet the needs of Polygon’s aggregation platform (AggLayer).
With these planned changes, will MATIC manage to erase its losses from August?
MATIC in race to erase August losses
Source: MATIC/USDT, TradingView
On the daily chart, MATIC has been in an uptrend as it has moved above the $0.42 level. Since August 16 (last Friday), MATIC has been on an extended rally that has generated nearly 20% gains, at the time of writing. This has reversed most of its losses from August.
At the time of publication, MATIC stock was trading at $0.47 and had to break through two key resistance levels to reach the supply zone at $0.55. The immediate hurdles were at $0.49 and $0.51. Given the massive buying pressure exerted by the Relative Strength Index (RSI) that is above its average level, these targets could be achieved.
At the same time, the Stochastic RSI was overheating as it was in the overbought territory. Therefore, a slowdown could not be ruled out for the MATIC rally. Moreover, the $0.46 and $0.42 levels were key short-term supports to consider if the rally slowed down.
Short-term MATIC holders increase by 8%
Source: Santiment
Interestingly, MATIC was one of the few tokens to enjoy positive market sentiment at the time of writing, as evidenced by the increase in weighted sentiment. In other words, speculators were bullish on the token’s potential.
However, after the latest surge, the 30-day MVRV (Market Value to Realized Value) has increased by +8%. This means that MATIC holders who bought the altcoin in the last 30 days have recorded 8% in unrealized profits.
This also meant that the altcoin was relatively overvalued and could attract profit-taking. Therefore, the upper resistance levels would be crucial for a likely reversal. In fact, according to data from IntoTheBlock, between $0.40 and $0.55, only 33% of addresses were in profit after the surge.
The majority of addresses between $0.51 and $0.52, or about 8,000 users holding nearly 20 million MATIC, were in losses. They would have broken even if prices had reached those levels, which could have prompted them to sell their holdings.
Source: IntoTheBlock
Thus, MATIC’s extended rally could face headwinds at $0.51 or $0.55, key resistance levels that could attract selling pressure.
