Polygon’s Support Holds Firm, But Could MATIC Drop to $0.61 This May?

Polygon’s Key Level: Will MATIC Rise to $0.83 or Fall to $0.61 in May?

Polygon’s native token, MATIC, is at a critical juncture, where the decision by a large cohort of investors could determine its next move. According to data from IntoTheBlock, 31,000 addresses bought 216.94 million MATIC tokens at an average price of $0.73. This is a pivotal breakeven point for many holders, and the price action around this level could indicate whether MATIC is set for a breakout or a correction.

Profitability and Key Resistance Levels

At the time of writing, over 17.34% of holders were in profits, totaling 111,724 addresses. However, a significant majority, representing 77.85% or 501,710 addresses, were “out of the money,” indicating that their entry points were above the current price. The following factors could impact MATIC’s price direction:

• Breaking Above $0.73: A surge beyond this level could push MATIC towards $0.76, where an additional 36.69 million tokens were accumulated. This could lead to further momentum towards $0.83, keeping more holders in profits.
• Breaking Down Below $0.73: A fall below this key level could trigger a drop to $0.61, where many profitable holders have their entries. This could indicate a bearish trend for the token.

Correlation with Ethereum and Bitcoin

Polygon’s price movement is heavily influenced by other major cryptocurrencies, particularly Ethereum (ETH). The correlation between Polygon and Ethereum is at 0.93, indicating that they often move in tandem. The correlation with Bitcoin (BTC) is also significant, at 0.87. If Ethereum manages to avoid dropping below $3,000, MATIC might continue its journey towards $0.83. However, if Ethereum sees a downturn, MATIC might correct to the lower levels.

Critical On-Chain Metrics: MVRV Z Score

Another crucial indicator to watch is the Market Value to Realized Value (MVRV) Z Score. A reading below zero indicates bearish dominance and suggests that the price may struggle to increase. Conversely, a positive reading suggests bullish momentum. Currently, Polygon’s MVRV Z Score stands at 0.19. A further decline in this metric could trigger a bearish phase, potentially invalidating the optimistic predictions.

If the MVRV Z Score remains positive or rises, it could mean that MATIC is undervalued, and a breakout to the upside is possible. Traders and investors should monitor this metric closely to anticipate the direction of the token.

Final Thoughts

As MATIC hovers near the $0.73 breakeven point, it’s make-or-break time for the token. A positive turn could lead to a breakout towards $0.83 and beyond, while a negative shift could see it fall to $0.61. Ethereum’s and Bitcoin’s movements will also play a significant role in determining MATIC’s trajectory. Traders should watch these factors closely to make informed decisions about the token’s future.