• With these factors in place, MATIC could be on its way to a breakout

  • The overall state of the crypto-market has been satisfactory, to say the least, as a result of strong Bitcoin gains. However, the diminishing returns provided by some of the top altcoins, such as Cardano, Solana, Avalanche, and MATIC, have created uncertainty for these altcoins.

    Nonetheless, there were subtle signs in price structures and the state of on-chain metrics that led to some optimism about their future trajectories, particularly for MATIC.

    Price is trapped in a closed channel.

    MATIC surged 10% to a three-week high of $1.42 on October 8 after making lower lows for the majority of September. Polygon was rumored to be overshadowing the Ethereum network after its active addresses briefly flipped ETH’s a week ago. However, the increased adoption of its interchain scalability solution is indirectly beneficial to Ethereum.

    The reason for this is that Polygon is an L2 solution that runs on the Ethereum network to speed up transaction processing and make it easier for Ethereum-built apps to work with other blockchain platforms.

    Polygon recently released “Swap for Gas” on the same day its price reached a new three-week high. Swap for Gas is a simple solution for sourcing MATIC on Polygon Mainnet that also facilitates bridging. Nonetheless, these developments were unable to break MATIC’s range-bound momentum or propel it above the $1.5 mark.

    Is a bullish structure on the way?

    The bright side of MATIC’s limited movement was that it has been forming a bullish structure in terms of price. With the 14-day RSI above 50 and pointing upward, the alt may see further gains once the key resistance level of $1.5 is breached.

    Furthermore, its price appeared to form a massive triangle. Breaking through the trend line and settling above it could result in a strong price movement to the triangle’s base.

    As a result, with a symmetrical triangle on MATIC’s price tightening, the chances of a breakout appear to be increasing.

    Perpetuals market is being fueled by network growth.

    According to DefiLama data, TVL in Polygon is just shy of $9 billion, standing at $8.43 billion at the time of writing, but the protocol could reach those levels by the end of October. This expansion of MATIC’s network could be attributed to the NFT boom and the gaming slump.

    Other factors, such as the Polygon blockchain being used by Switzerland’s postal service, contributed to the coin’s positive narrative amid consolidation.

    Notably, MATIC’s percentage of total stablecoin supply held by whales, with more than 5 million USD, has been increasing. As the metric approached ATH levels, prices did not show a significant increase, indicating that whales were stockpiling, which was a positive sign for MATIC’s price in the near future.

    Furthermore, in the Perpetuals market, Open Interest for the altcoin appeared to be steadily increasing. In fact, since the time of writing, OI has risen 7.15 percent in a single day.

    However, active addresses and daily active addresses indicated a lack of market participation, while a low trade volume trend indicated skepticism in the spot market. Nonetheless, with the network growing and certain metrics aligning, a strong bullish push could send MATIC to a new ATH.

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