- Polygon has extended its recovery to offset August losses
- However, important hurdles are at USD 0.51 and USD 0.55.
Polygon (MATIC) has been among the top five outliers on the daily and weekly price charts. Since last Friday, MATIC is up nearly 20% while the rest of the market has been trading sideways.
But that’s not all, because in a new update on September 4th, Polygon will change its native token from “MATIC” to “POL”. The exchange ratio will be 1:1 for MATIC to POL. According to the Polygon team, the transition aims to make POL the gas and staking token for the ecosystem. It could be expanded to serve Polygon’s aggregation platform (AggLayer).
Will these planned changes help MATIC make up for its losses in August?
MATIC tries to make up for the losses from August
Source: MATIC/USDT, TradingView
On the daily chart, MATIC was bullish as it rose above the $0.42 mark. Since August 16 (last Friday), MATIC has embarked on an extended recovery, yielding almost 20% gains at the time of writing, erasing most of its losses from August.
MATIC was trading at $0.47 at press time and needed to clear two key resistance levels to reach the supply area at $0.55. The immediate hurdles were at $0.49 and $0.51. Given the massive buying pressure shown by the RSI (Relative Strength Index) above its average level, these targets could be met.
At the same time, the Stochastic RSI was overheated as it was in the overbought zone. Therefore, a cooling off of MATIC’s rally could not be ruled out. Also, the $0.46 and $0.42 levels were important short-term supports to consider in case the rally cooled off.
Short-term MATIC holders up 8%
Source: Santiment
Interestingly, at the time of writing, MATIC was among the few tokens that had positive market sentiment, as evidenced by the increase in weighted sentiment. Simply put, speculators were optimistic about the token’s potential.
However, following the recent surge, the 30-day MVRV (market value to realized value) increased by +8%. This meant that MATIC holders who bought the altcoin in the last 30 days made 8% unrealized gains.
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, between $0.40 and $0.55, only 33% of addresses were in profit after the bounce, according to IntoTheBlock data.
The majority of addresses between $0.51 and $0.52, or about 8,000 users with nearly 20 million MATIC, recorded losses, so if prices had reached these levels, they would have reached breakeven, which could tempt them to sell their holdings.
Source: IntoTheBlock
Therefore, MATIC’s continued recovery could face headwinds at $0.51 or $0.55, key resistance levels that could exert selling pressure.
