MATIC Reclaims $1 Mark, Potential for Further Gains Ahead

MATIC reclaims the 1-dollar mark – Could this be a sign of further gains?

MATIC, the native cryptocurrency of the Polygon network, has recently reclaimed the 1-dollar mark. This positive development could indicate further gains. But what about the details?

The facts at a glance

After a 20 percent increase over the past seven days, MATIC has surpassed the 1-dollar mark. The current price is 1.005 dollars. However, this could just be the beginning, as some on-chain metrics suggest further potential. One of these metrics is circulation, which measures the number of tokens involved in transactions over a certain period of time.

Circulation and price development

In most cases, an increase in circulation suggests likely selling pressure, which could lower the price of a cryptocurrency. Conversely, a decrease in circulation could indicate price stability or a significant upward trend. According to an analysis by Santiment, the seven-day circulation of MATIC has been declining since December 27.

Possible price increase to 1.20 dollars

If this trend continues, the price of MATIC could rise by another 20 percent. In this case, the native token of Polygon could climb to 1.20 dollars in the coming weeks. A technical analysis shows that capital is increasingly flowing. The Money Flow Index (MFI) was 87.58 at the time of the analysis. This means that MATIC is overbought, as the MFI value is above 80.00. This could lead to a price decline. If the price corrects, the next targets could be at 0.88 and 0.92 dollars, where the Fibonacci retracements of 0.618 and 0.236 are positioned.

Long-term perspectives

Despite the possibility of a short-term pullback, it seems unlikely that the price of MATIC will fall below 0.90 dollars in the near future. In a very positive market development, the price of MATIC could even rise to 1.20 dollars. An analysis of the liquidation heatmap, which shows price zones where highly leveraged traders could lose money, shows that long positions at prices above 1.05 dollars could still make profits. However, caution is advised and high leverage should be avoided, as market conditions could change from bullish to bearish at any time.

Conclusion

In summary, it may currently not be a good idea to open short positions on MATIC. Despite the positive forecast, the native Polygon token could experience a correction before further increase. Therefore, both long and short traders should be cautious and not place large bets.

Sources: Santiment, TradingView, HyblockCapital