MATIC price aims for double-digit rally as Polygon whales stock up 55 million tokens in five days

MATIC price had a good beginning to December, followed by a disappointing mid-month performance, and is now looking at a bullish end. The altcoin is finding immense support from its whales, which have proven to be a key indicator of a rally in the past. This could cause the Polygon token to climb and breach the seven-month-old barrier.

MATIC price expected to see a recovery

MATIC price noted a 17% decline over the past couple of days after failing to breach the resistance level marked at $0.920. This price point has been acting as a barrier for the past seven months, noting a brief breach back in May this year.

As a result of the decline, MATIC price landed at $0.765, bouncing off the support line to trade at $0.813 at the time of writing. Although this points towards potential consolidation within the $0.920 and $0.765 range, in the short-term timeframe, the Polygon token is showing signs of recovery.

The Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) are both hinting at waning bearishness. RSI flipping neutral line at 50.0 into support and MACD noting a bullish crossover with green bars present would confirm the initiation of recovery.

MATIC/USD 1-day chart

This would play in favor of the bullish outlook, which suggests a rise to and breach of the $0.920 resistance line is possible. The on-chain behavior of investors is hinting at the same, and flipping the seven-month-old barrier into support would send MATIC price to $1.

However,  another failed breach would mean that the altcoin is going to witness a decline again and remain consolidated for a while. At the same time, if the $0.765 support is lost, the bullish thesis would be invalidated, calling for a correction to $0.700.

Whales are aiming at profits again

Polygon whale addresses turned bullish once again over the past few days after shedding their holdings since the beginning of the month. Since December 16, addresses holding between 1 million and 10 million MATIC have noted an increase of 55 million MATIC tokens worth a little over $44.5 million, bringing their holding to 930.97 million MATIC.

Polygon whale holding

Their accumulation came right as MATIC price began correcting and stopped just as the altcoin bounced back from $0.765. These investors have been a crucial indicator of a changing trend in the past, with rallies occurring after their accumulation and correction following their selling.

Plus, their behavior also substantiates the conditions that hint at recovery falling in line with the inference of the Market Value to Realized Value (MVRV) ratio. This metric is an indicator that is used to estimate the average profit/loss of investors who purchase an asset. The 30-day MVRV ratio measures the average profit/loss of addresses who purchased an asset in the past month. 

For Polygon, the 30-day MVRV sits at -3.85%, which indicates that those who purchased MATIC in the past month are sitting at 3.85% losses. However, when MVRV is below -7%, investors tend to hold off on selling their holdings as it is an ideal time for accumulation. This is often followed by rallies, giving this area the term “opportunity zone”.

Polygon MVRV ratio

Polygon whales largely accumulated their MATIC tokens when MVRV was below -7%, giving strength to the possibility of a recovery.