Polygon is on track for a 145% rally by year-end

Polygon is heading for a major upside, with potential gains of 145% by the end of the year. Despite the short-term challenges, key support levels and bullish indicators suggest this could be a strong investment opportunity.

Support and resistance levels

Polygon (MATIC) stock is currently trading above an important range, defined by two support levels: $0.33 and $0.50. The $0.33 level showed strong potential for an upward move in March and April 2021, June 2022, and August 2024. After reaching $0.33 in June 2022, MATIC stock has surged 311.44% in 140 days.

The second major support level at $0.50 also influenced MATIC’s price trajectory. Over the past two years, the asset has been oscillating within a channel bounded by $0.50 at the lower end and $1.29 at the upper end. The $0.50 level has served as a strong foundation for bullish moves. During the period from August to October 2022, MATIC stabilized around $0.50 before starting a 161.92% 184-day rally. Historically, MATIC’s bullish moves from these levels have faced resistance near $1.29.

In the context of macroeconomic factors, especially the expected interest rate cut in September and the seasonally weak performance of cryptocurrencies in September, MATIC may show a period of consolidation around the $0.50 area before resuming its upward trajectory towards the $1.29 target by the end of the year. Although market conditions may push the price to the $0.33 level, such a pullback will not undermine the fundamental bullish outlook. The $0.33 to $0.50 area represents a strategically advantageous entry point. Entering a long position within this range may yield higher returns compared to chasing the price at higher levels during periods of increased market activity in the future. Moreover, other indicators also support the expectation of a continuation of the uptrend.

Stochastic RSI

The weekly stochastic RSI indicates a favorable entry point when it dips below 20. Although occasional false signals have emerged where the indicator has declined without making a significant move, the area below 20 remains an attractive area to initiate long trades. Momentum has shifted from bearish to bullish as the stochastic RSI moved through the 20 level, consolidated, and has now returned above it, indicating renewed bullish momentum.

50 day moving average

Since 2021, in 9 out of 10 instances where the price moved above the 50-day moving average on a daily time frame and maintained a position above at least 10% for three days or more, the market followed with a significant upward move. MATIC recently reversed this pattern and remained above the $0.50 level for several days.

Moving Average Convergence/Divergence

Another indicator that suggests the bullish momentum could continue is the MACD. On the weekly time frame, the chart has started to turn positive, with the MACD line approaching a bullish crossover above the signal line. In the last two instances where this setup occurred, the MATIC saw significant upward moves, suggesting a strong possibility of a similar outcome this time around.

Bollinger Bands

In three out of four instances where MATIC touched the lower band, it was followed by significant upward moves. These moves occurred in June 2022, June 2023, and now August 2024, indicating a possible repetition of the pattern. The only exception was in April 2024, which turned out to be a false signal.

Strategic Considerations

MATIC stock represents a long-term opportunity with strong upside potential, although short-term volatility may occur due to macroeconomic factors. A pullback to $0.33 or consolidation around $0.50 is possible, but a year-end target of $1.29 remains possible.

Traders have three options:

• Enter now for a long timeEntering a long position at the current level and holding it until the end of the year could result in a return of around 145%.
• Wait for correctionThose who expect the September rate cut to slow the market in the short term may choose to wait until MATIC drops to around $0.33 before entering. This approach could result in a return of around 290% by the end of the year.
• MATIC SHORT BEFORE GOING LONGThe most aggressive strategy involves shorting MATIC stock to $0.33 and then switching to a long position. However, successfully executing this strategy requires a high degree of accuracy in predicting the market decline, which is a difficult and speculative endeavor, even more so than the price analysis provided. While this scenario can be profitable, the risks are much higher.

Given the uncertainty surrounding this, the safest approach is to choose either option 1 or 2. Either way, the chances of incurring significant losses by the end of the year are slim.