Technical Analysis: Polygon (MATIC)
MATIC with a hot start at the beginning of the year. Are we in for another parabolic run or further accumulation? Read more to find out!
Table of Contents
What is Polygon?
MATIC / USDT on the Monthly Chart
MATIC / USDT on the Weekly Chart
MATIC / USDT on the Daily Chart
Summary
Polygon (MATIC) continues to steal the spotlight. At the time of this writing, MATIC is ranked as the 17th largest cryptocurrency according to Coingecko. The market cap is sitting around $13.8 billion.
Are we going to see another ATH or was this the bull run? Before jumping into the charts, let’s take a step back for a second and understand what the project is about.
What is Polygon?
Polygon, (previously the Matic Network) is a well-structured, easy-to-use Ethereum scaling and infrastructure development. Its core component is Polygon SDK, a modular, flexible framework that supports multiple types of applications.
Polygon allows one to create Optimistic rollup chains, ZK rollup chains, and even stand-alone chains. Polygon effectively transforms Ethereum into a full-fledged multi-chain system.
What is MATIC?
MATIC is Polygon’s native token.
The MATIC token helps drive development across the network. The token can also be used for staking and participating on the network.
Users cab earn MATIC by providing computer resources/services to the Polygon network. This is possible by validating transactions or executing smart contracts on the network.
Additionally, by staking your MATIC users gain the ability to vote on network upgrades.
Let’s go!!! We now have a better understanding of Polygon (MATIC), let’s hit the charts!
MATIC/USDT on the Monthly Chart
As usual, we are sticking to our log chart, and keeping things simple.
Taking a step back we can see price remains in a strong uptrend despite overall market conditions. We can also see MATIC tends to fall into these accumulation zones before going parabolic (view left to right)
Some things that stand out:
- Candle #1 confirming support
- Candle #2 with a retest and higher low of the previous candle.
- Candle #3 the breakout
We see these (3) candles in our first accumulation before breaking going full moon. Now shifting to the most recent candles we can also see the same structure playing out.
MATIC/USDT on a Weekly Chart
Sticking to our log chart, and shifting to our pattern timeframe.
Take a closer look we can see since tapping liquidity in July ($0.60) we have been in this vertical accumulation. We also see price action forming higher highs and higher lows.
We are also seeing price flipping the previous resistance for support. A close above this resistance level and expect to continuation. When we just look at price action, things look good. But what else is going on?
Ethereum Layer 2 and ZK-Rollups
Layer 2 is a term for solutions designed to help you scale your application by handling transactions off Ethereum mainnet while taking advantage of the decentralized security of layer 1.
Rollups are the solutions that perform transaction execution outside of Ethereum but post the transaction data on layer 1.
Why is this important?
Although Polygon does not have ZK-Rollups, it is in progress. Polygon’s mission is to bring Ethereum to the masses. Although it is not confirmed that Polygon will be the scaling solution for Ethereum, however, it is highly likely.
Before Polygon was working on ZK-Rollups there were already many other projects coming over to the network and building on Polygon. MATIC’s speed and cheap fees attract many users to the world of DeFi.
Summary
MATIC is the native token for the Polygon platform. Polygon is a well-structured, easy-to-use Ethereum scaling and infrastructure development.
- The MATIC token serves dual purposes: securing the network via staking and being used for the payment of transaction fees.
- The monthly chart shows a healthy uptrend, with accumulation zones and candle breakdown.
- The weekly chart shows us we breaking out of accumulation and respecting an ascending triangle pattern.
- Layer-2 and ZK-Rollups, Ethereum’s scaling solution.
Remember that this is all based on the subjective views of the writer. As always do your research — youngcryptowolf 🐺
The contents on this site are for informational and entertainment purposes only and does not constitute financial, accounting, or legal advice. I can’t promise that the information shared on my posts is appropriate for you or anyone else.
