Brace for a Polygon Pullback
MATIC price is cruising as investors cheer the recent news from Meta Platforms. Polygon jumped to a high of$1.15, which was the highest point since April. It has climbed by more than 260% from its lowest level this year. Other coins that jumped were Flow and Arweave.
MATIC price has done well in the past few weeks as investors bought the dip. The latest catalyst for the coin’s price action was a statement by Stephan Kasriel, Meta’s head of Commerce and Financial Technologies solutions.
In his post, he talked about the role of the creator economy and how it can leverage the blockchain technology. One way this will happen will be incorporation of NFTs in daily lives. For example, a creator could use Insragram to sell a ticket in form of an NFT. Similarly, people can use smart contract technologies to market their NFTs in popular platforms like Whatsapp and Instagram.
According to Kasriel, the features wil first launch on Polygon followed by Solana and Phantom. It will also have integrations with OpenSea and Arweave. Arweave is a leading blockchain network in the file storage segment.
So, is Polygon still a buy? In my view, I believe that MATIC price has gone up too fast as investors overreact to the announcement. As such, there is a likelihood that it will retreat as this momentum fades. History backs this up. In March, Loopring price jumped by more than 50% in a day after its integration with GameStop’s NFTs. It has come back to earth since then.
MATIC price prediction
The daily chart shows that the Polygon price went parabolic on Thursday and Friday. As it rose, it managed to move above the important resistance at $1.0694, which was the highest level on August 14. It remains above the 25-day and 50-day moving averages while the Relative Strength Index (RSI) rose to the overbought level.
Therefore, while more gains are possible, I suspect that the coin will have a pullback as buyers take profits. If this happens, it will likely retest the support at $1. A move above the resistance at 1.1500 will invalidate the bullish view.
