Polygon price to explode 30% as MATIC whales kick-start accumulation

Polygon price is looking to chart new year-to-date highs as its investors have changed their stance to bullish. The altcoin is likely following the pattern noted before the alt season begins, which could further support the bullish outlook resulting in a significant increase.

MATIC price eyes new targets reach

MATIC price Right now, if the bullish outlook observed at investors' hands plays out, Polygon price would be looking at breaching the critical resistance (CR) level at $1.27, which stands at the confluence of the 50% Fibonacci Retracement of $1.52 to $1.01. Flipping this level into support is crucial for the altcoin so bulls can propel it by 32% to tag 2023 highs at $1.52. 

MATIC/USD 1-day chart

The Relative Strength Index (RSI) standing above the neutral line in the bullish zone shows there is still considerable room for a rally. However, a failure to breach the critical resistance would result in a retracement towards the critical support (CS) at $1.04.

Falling through this level would invalidate the bullish thesis as it would pull MATIC back to March lows and beyond toward $0.930, marking a 20% crash. The drop would mark a two-month low for the price action, potentially weakening the investors’ confidence.

On-chain outlook for Polygon exudes bullishness

Polygon price is expected to chart a 30% rally as its investors have been heavy on accumulating for the past month. The first sign of the bullish expectations comes from the cohorts holding 100,000 to 10 million MATIC.

These wallets have been acquiring more and more tokens since the beginning of March, which historically has been an indication of an incoming rally. The balance in these wallets has noted a combined increase of 42 million MATIC worth $48.3 million.

MATIC whale holdings

Potential accumulation is also expected out of retail investors as Polygon has been gaining traction among users. The 330% incline in the network growth from 26,000 to 112,000, as seen in the chart below, suggests that user adoption is growing. This can be interpreted as new addresses being created on the network, which indicates that the project is gaining traction, and this momentum could translate into the network’s underlying token - MATIC.

MATIC network growth

This growth is backed by the fact that the altcoin is rising from the opportunity zone, as observed by the Market Value to Realized Value (MVRV) ratio. This is a ratio of an asset's Market Capitalization versus its Realized Capitalization which can be used to get a sense of when the price is above or below "fair value" and to assess market profitability.

The indicator standing below the neutral line between -10 to -40% at the beginning of March was considered to be in the opportunity zone as MATIC is still undervalued at this time, and investors would hold off on potential selling and instead look to accumulate. 

MATIC MVRV ratio

This stance could change when prices rise, and investors begin booking profits by selling their holdings. At this point, the MVRV ratio would be far above the neutral line in the danger zone, as observed in early February this year when the ratio was close to 25%. This zone is synonymous with corrections, but MATIC price is currently far away from the same.

When alt season?

While the changing markets can invalidate a theory at any point, most indications suggest that the arrival of the alt season is now a waiting game. As noted by analyst Moustache, Bitcoin dominance declining and altcoin dominance rising will trigger a widespread capital rotation into alts, thus triggering a widespread rally among altcoins, aka alt season.

Furthermore, breaching the two-year falling wedge and continued uptick would confirm the forecasts. This would note the beginning of the alt season, which could trigger a larger rally for MATIC and other altcoins.