One analyst explained how Polygon could see a rise of about 17% if the cryptocurrency price exceeds this level.
The parallel channel may reveal what could be next for the polygon
in mail On X, analyst Ali discussed the parallel channel that Polygon has been strengthening within over the past few weeks. The “parallel channel” here refers to a technical analysis (TA) pattern drawn using two parallel trend lines.
The upper line of this pattern connects successive highs in the asset while the lower line connects the bottoms. While the price is within the area bounded by these two lines (the “channel”), it will likely remain trapped in it, only strengthening sideways.
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Of course, a retest of the upper line will likely lead to reversals back to the downtrend, while the lower line may act as a source of support, helping the currency break out of the bottom and regain the uptrend.
There are different types of parallel channels in TA, such as ascending and descending channels, where the channel slopes up or down.
However, in the context of the present topic, the presence of a parallel channel parallel to the temporal axis is interesting. This means that consolidation within this channel occurs between the same upper and lower levels.
As with other TA consolidation patterns, a breakout from the trend lines of the parallel channel can also indicate a continuation of the trend in that direction. More specifically, a rise above the pattern could indicate bullish momentum for the asset, while a fall below the channel could lead to a bearish outcome instead.
Now, here's a graph showing what the parallel channel that Polygon has assembled inside of it looked like over the past month:
From the chart above, it appears that Polygon has been stuck in a consolidation process within this parallel channel since the cryptocurrency collapse last month.
The asset has made some attempts at the upper level, but so far, all of them have failed, as the coin has not been able to find any breakout. MATIC is currently moving near the level, so there may be another retest soon.
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If the polygon price rises above the channel this time, it may enjoy some continued upward momentum. “A break above $0.76 could trigger a 17% rally, pushing $MATIC to $0.88!” Ali notices.
This price target is based on the fact that the collapse that occurred last month, which threw the asset into this consolidation, occurred starting at approximately this level. Considering the possible retest of the channel's upper line, it now remains to be seen how the cryptocurrency will perform in the coming days.
Matic price
Polygon almost touched the upper level of the channel at $0.76 yesterday, but the coin has seen a pullback since then, and is now back at $0.72.
Featured image from Shutterstock.com, charts from TradingView.com
