This could actually line up for Matic traders who want to long

This could actually line up for Matic traders who want to long

MATIC bulls have been busy in the market after a long intermission. Since end-July, MATIC traded sideways between a tight channel but an ascending triangle breakout proved to be the catalyst for a much needed bull run.

While a resistance point at $1.53 could temporarily halt the upwards trajectory, a retracement would actually complete a cup and handle pattern on MATIC’s daily chart. At the time of writing, MATIC traded at $1.426 and held the 16th spot in CoinMarketCap’s crypto rankings.

MATIC Daily Chart

Since mid-June, MATIC has formed lower peaks at $0.91, $0.60 and $1. A curved trendline was used to plot these points which formed the ‘cup pattern’ on the charts, while the upper trendline presented a resistance mark at $1.53. A handle would form in case of a retracement towards $1.24 support- a development that would complete the bullish setup for MATIC.

An upwards breakout from $1.53 resistance could then trigger a jump towards the next critical resistance mark of $1.90- representing gains of 24% from the aforementioned support. Conversely, an immediate hike above $1.53 would negate this setup.

Reasoning

Relative Strength Index flashed overbought market conditions and suggested that MATIC needed to stabilize before its next push forward. A double top was also spotted on the Squeeze Momentum Indicator which could result in a drop of buying pressure. Meanwhile, the Directional Movement Index’s +DI converged towards the -DI as some selling pressure seeped into the market. Such conditions threatened a short-term decline, although market control still belonged to the buyers.

Conclusion

Long term conditions were favorable in the MATIC market and even though a slight retracement was expected, this was well within the confines of a bullish cup and handle pattern. Traders wishing to long this pattern can initiate buy trades in case prices fall towards $1.24-support. A reversal from this defensive line could culminate into a 24% hike at MATIC’s upper ceiling of $1.90.

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