- MATIC jumped 12.5% at press time, with analysts predicting a potential 450% rise.
- Despite growing investor interest, MATIC’s overbought RSI suggests possible short-term risks.
Polygon (MATIC) has had a tough year, underperforming its peers among the top cryptocurrencies by market cap.
While many major assets have seen impressive gains, with some up over 100% year-to-date, MATIC is down 3.5% over the same period.
However, recent developments suggest a potential change in dynamicsOver the past day, MATIC has seen a significant price increase of 12.5%, bringing its trading price at press time to $0.5303.
This spike was particularly notable given the token’s recent lows, where it traded below $0.400 earlier this month.
MATIC: 450% increase in sight?
The recent price movement has caught the attention of analysts. A prominent crypto analyst, Javon Marks, recently common his optimistic outlook for MATIC on X (formerly Twitter).
Marks highlighted that MATIC was starting to show “major strength” and suggested that the token could be on the verge of a substantial rally.
The altcoin could potentially surge to new all-time highs, with a possible increase of over 450% from its levels at the time of publication.
Source: Javon Marks/X
This bullish sentiment was further supported by the chart shared by Marks, which showed MATIC forming a broadening wedge pattern.
This technical formation is often considered a bullish continuation pattern, indicating that MATIC could be poised for a significant upward move.
Fundamental analysis
To understand whether MATIC is truly positioned for a significant rally, AMBCrypto assessed its underlying fundamentals.
One such level is the open interest rate, which refers to the total number of outstanding derivative contracts for the asset.
According to data According to Coinglass, MATIC’s open interest has increased by nearly 40% over the past day, reaching a press time valuation of $209.39 million.
Along with this, the open interest volume also saw a substantial increase of 216%, now valued at $1.30 billion.
Source: Coinglass
This increase in open interest and volume suggests growing investor interest and participation in the MATIC market.
When open interest increases alongside price, it often indicates that new capital is flowing into the market, which can lead to further price appreciation.
However, it should be noted that while increasing open interest can be a bullish signal, it can also lead to increased volatility, especially if traders have high leverage.
This means that while the potential for further gains exists, there is also an increased risk of sharp price movements in one direction or the other.
Another key indicator to consider is the Relative Strength Index (RSI), which measures the speed and direction of price movements.
An RSI value above 70 generally indicates that an asset is overbought, while a value below 30 suggests that it is oversold.
According to data According to CryptoQuant, MATIC’s RSI was 72 at press time, indicating that the token is in overbought territory.
Source: CryptoQuant
Is your portfolio green? Discover the MATIC profit calculator
Traders often use the RSI as a signal to assess whether an asset is overvalued and may be due for a correction.
In the case of MATIC, the overbought RSI suggests that while the token has seen a significant gain, there could be short-term pressure on the price if traders start taking profits.
