Seizing the Buying Opportunity: Is Now the Right Time to Consider MATIC?

Introduction

Recent metrics indicate that MATIC may have been overvalued, but a potential retracement could pave the way for another rally. This article explores the current state of MATIC and whether it presents a buying opportunity.

MATIC’s Bullish Bias

MATIC has shown a strong bullish bias, with a retest of $0.95 potentially triggering a renewed rally for the coin.

On-Chain Metrics

Some on-chain metrics suggest the possibility of increasing sell pressure on the token.

Breaking $1 Resistance

Polygon (MATIC) successfully breached the critical $1 resistance level on December 26th, reaching as high as $1.09 and currently undergoing a pullback. This development is positive news for MATIC bulls.

zkEVM Network Activity

Recent reports indicate a drop in zkEVM’s network activity despite a rising TVL. The futures market reflects strong bullish sentiment, and this trend could continue if MATIC defends the $0.95-$1 support zone.

Market Structure Analysis

The MATIC market structure reveals the potential for significant gains. The one-day chart displays higher lows and higher highs since December 23rd, with the token trading within a bullish range. The OBV and RSI indicators suggest buyer control, making the $0.93-$0.98 region a strong buying opportunity.

• Fibonacci retracement levels at $0.9218 and $0.8813 are close to the range high.
• A former bearish order block has turned into a bullish breaker, establishing a demand zone on the 1-day timeframe.
• A fair value gap (white) in the $0.93-$0.98 region marks an area of interest for swing traders.

These factors indicate a robust buying opportunity targeting $1.17 and $1.3, the Fib extension levels northward.

Weighted Sentiment and Market Trends

Despite the strong rally since October, the mean coin age has not consistently trended upward, suggesting holders may be more focused on securing profits. However, positive sentiment on social media in recent days, along with a spike in dormant circulation, indicates potential for further price action.

• Traders should watch for another surge in dormant circulation, signaling potential selling pressure.
• The MVRV ratio, nearing the October high, suggests MATIC is currently an overvalued asset, prompting holders to consider booking profits.