From a weekly timeframe, the $0.316-0.5 area is a bullish order area, and MATIC's rebound from $0.5 means that $0.6 and above are feasible bullish targets (Official Account: Pepe Soha)

  • MATIC has a bullish market structure on the daily chart.

  • Sentiment data and price action on the shorter time frames suggest that a rebound from the $0.52-0.55 area could begin next week.

For most of the past month, the price of Polygon [MATIC] has been trading just above the $0.50 weekly supply zone. It rebounded to $0.60 but was forced to fall back to the $0.55 support level. In other news, the POL contract will be launched on the Goerli testnet, which is an important step towards Polygon 2.0.

A recent report from AMBCrypto analyzing MATIC’s price action highlighted that there is strong resistance in the $0.59 to $0.6 area. In fact, MATIC reversed from this area, but can the bulls continue higher?

Holding the $0.5 level is an encouraging sign

Looking at the weekly timeframe, the $0.316-0.5 area is a bullish order zone. We can see that MATIC bulls have been stubbornly defending this area since June. The market structure on the daily chart has seen a bullish reversal over the past ten days. This occurred on October 1st when the price broke through a lower high of $0.55 (orange).

The rally almost reached $0.6 and was used to plot a set of Fibonacci retracement levels (light yellow). The 61.8% level is at $0.5389 and the 78.6% level is at $0.5224. Therefore, this area could offer an attractive buying opportunity with the target of an extension above $0.6.

While the relative strength index (RSI) is consistent with the market structure, reflecting bullish momentum, the overall volume (OBV) is slightly weakening. September is trending higher, but we have not seen a significant move higher like we did in July. This suggests that a breakout above $0.6 could attract a large number of buyers, quickly pushing prices further higher.

On-chain indicators show positive sentiment

The average coin age metric dropped in the hours before press time, but has been trending upward since late July. It highlights accumulation by holders, but a wave of selling occurred on October 6. The spending age metric has been dormant for the past two weeks. The last notable spike occurred on September 27, when MATIC retested the $0.5 support level.

The funding rate was negative in mid-August, but things started to change after the first week of September. The weighted sentiment is also getting higher. Together, they indicate a bullish outlook for MATIC.