MATIC price could extend gains, makes comeback above $0.80 alongside altcoin rallies

MATIC, a Layer-2 Ethereum scaling token, noted a price rally that pushed the asset past the $0.80 mark, for the first time since July 2023. MATIC price climbed steadily alongside altcoins that have rallied this week, as Polygon ecosystem users engaged in accumulating the token. 

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MATIC price rally fueled by these catalysts

Key MATIC wallets holding between 100,000 and 10 million tokens have been consistently adding to their holdings, according to data from crypto intelligence tracker Santiment. The wallets in this segment added 42.88 million MATIC tokens, worth nearly $35 million, since October 24. 

Accumulation of MATIC by these wallet addresses, removed these assets from the Layer-2 token’s circulating supply, thereby reducing the selling pressure on it. MATIC price crossed a crucial price level, $0.80, fueling a bullish outlook among the token’s holders. 

The weighted sentiment, a metric that combines the positive and negative commentary on MATIC across social media platforms, climbed into the positive territory, hitting 0.929, according to Santiment. This signals a bullish outlook on MATIC among traders.

The second catalyst supporting MATIC’s price rise is the increase in activity on the asset’s blockchain. MATIC transactions valued at $100,000 and higher, hit 161, the highest level noted since July 2023. While this would typically be considered bearish for the asset, alongside a price rally in MATIC, it supports a bullish thesis. Strong whale activity and accumulation by wallet addresses have contributed to MATIC’s price rise. 

MATIC wallet and on-chain activity

Massive spike in activity and MATIC price, added 54% to its market capitalization within three weeks.

At the time of writing, MATIC price is $0.8163 on Binance. The altcoin is on track to hit its $1 target, if the bullish momentum is sustained. 

MATIC price rally likely to continue

As seen in the price chart below, MATIC price recently broke out of its multi-month downtrend. 25% gains in MATIC are projected from the current price level of $0.8163 to the next target at the 50% Fibonacci Retracement level of the decline from the February 18 local top to September 11 bottom. The 50% Fib level is at $1.0289. MATIC price needs to breach resistance at the 38.2% Fib level, at $0.9028 to rally towards its target.

MATIC/USDT 1-day chart 

If MATIC price drops below the 23.6% Fib level at $0.7468, the bullish thesis is likely to be invalidated. In that case, MATIC price could drop to $0.6921, its 200-day Exponential Moving Average (EMA) that doubles as support for the Layer-2 scaling token.