Polygon (MATIC) price is showing a bullish divergence on a momentum indicator, suggesting a bullish move. Recent on-chain data revealed a capitulation event that occurred between June 12 and 18, prompting a group of whales to accumulate MATIC tokens, adding further bullish sentiment.
MATIC prepares for a 27% increase
Polygon price retested its weekly support at $0.509 on Tuesday and rose 8% to $0.572, the current price.
Additionally, the lower low formed on June 18 does not reflect the higher highs of the Relative Strength Index (RSI) during the same period. This development is called a bullish divergence and often results in a trend reversal or a short-term rally.
If $0.509 holds, MATIC could rally 10% from the current trading price of $0.572 to hit a daily high of $0.628 on June 16.
Furthermore, if MATIC closes above the daily resistance at $0.652, it could continue to rally another 17% to retest the weekly resistance at $0.738.
MATIC 1-day chart
On-chain data provider Santiment’s Net Net Profit/Loss (NPL) indicator calculates daily Return On Investment (ROI) at the network level based on the coin’s on-chain trading volume coin. coin. Simply put, it is used to measure market pain. Sharp spikes in a coin’s NPL indicate that its holders are selling at a significant profit. Conversely, sharp drops indicate coin holders are realizing losses, suggesting panic selling and investor capitulation.
In the case of MATIC, the NPL indicator spiked twice, -5.3 million and -3.15 million, from June 12 to 18, coinciding with a 14% price drop. This sharp drop suggests that holders are realizing losses, suggesting panic selling and investor capitulation.
MATIC Network Actual Profit/Loss Chart
Santiment’s Supply Distribution Index shows that whales holding between 1 million and 10 million MATIC tokens fell from 218.82 million to 251.70 million from June 12 to 18. Meanwhile, the number The amount of MATIC tokens held in wallets between 10 million and 100 million and between 100,000 and 1 million increased from 218.82 million to 243.09 million and from 201.01 million to 206.42 million during the same period.
This interesting development suggests that the first group of whales may have fallen into the surrender event. In contrast, the second and third wallet groups seized the opportunity and accumulated MATIC at a discounted price.
MATIC Supply Distribution Chart
While on-chain indicators and technical analysis both point to a bullish outlook, if Polygon price creates a daily candle that closes below the $0.509 weekly support, the move will invalidate the argument. bullish point by creating a lower low on the daily timeframe. This development could send MATIC price down 18% to retest the daily low of $0.418 from June 30, 2022.
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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
Vuong Tien
According to Fxstreet
