Polygon Crypto Out Of A Descending Channel As Prices Recover

The Polygon (POL) crypto is successfully breaking out of a descending triangle, indicating a possible end to the latest downtrend.

Analysts believe the breakout creates a strong play for a rally, with a bullish target of $0.69.

This comes in the wake of growing trading volumes and increased market activity, which have been acting as fillers for the fear and uncertainty in the cryptocurrency market.

Breaking Out of a Prolonged Downtrend

A descending triangle is the bearish continuation pattern that normally occurs in downtrends.

This pattern is considered when a stock makes a series of lower highs and these hits touch a relatively flat support level.

For the past several weeks, Polygon’s price action has been hemmed inside this pattern, with resistance levels repeatedly sending prices back down.

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Luckily it was revealed that Polygon crypto has now escaped this pattern, as shown in the chart shared by analyst Ali Martinez.

A breakout above the descending trendline indicates buyers have overwhelmed the resistance, which may set a path for trend reversal.

At $0.49, POL is still rising and the gusto for bullish momentum is increasing.

It coincides with key Fibonacci retracement levels & makes for a breakout.

It tracks back to $0.69, which is the 23.6% Fibonacci retracement from the previous downtrend, where the token could potentially recover.

At this level, this presents a major upside for traders, close to nearly 46% above current prices.

Recent Market Performance

Its 24-hour performance, however, also mirrors that of Polygon crypto. On 1 January 2025, per CoinMarketCap, POL was exchanged at $0.4603.

The token is up by a modest 2%  in the last 24 hours, and trading volume has gone up by 75.96% to $20.64 million.

Since the breakout, the increase in transactions reflects demand and belief in the asset.

Its circulating supply is 1.91 billion POL tokens, which puts the token’s market cap at $880.95 million.

Even as these coins drop in value, these metrics show how firmly Polygon crypto is established within the cryptocurrency market.

When looking closely at the 4-hour chart of MATIC/USD on Coinbase, it’s clear that the POL price remains below its 50-day, 100-day, and 200-day Simple Moving Averages (SMAs).

These are important indicators of long-term market trends. POL is also breaking out, but it has yet to break above these SMA resistance levels.

Immediate barriers are at the 100-SMA of $0.46 and the 200-SMA of $0.48. A close above those levels should be sustained, confirming that the bullish trend will continue.

Furthermore, plotting Fibonacci retracement levels on the breakout chart with Polygon’s price gives us further insight.

Technical analysts use these levels to pinpoint potential reversal points and target areas where prices will move.

Key Resistance Level at $0.50

The breakout has taken POL to levels above the 61.8% Fibonacci retracement level, a key resistance at $0.50.

So Polygon (MATIC) first has to clear resistance at $0.55 (50% retracement) and then the next highest at $0.60 (38.2% retracement) before targeting $0.69.

The volume on the chart also suggests more people are getting bullish. Higher trading volumes are a critical indicator of a move’s validity, and that’s exactly what saw the breakout.

Normally, breakouts are often short of volume to sustain uptrends.

But in this case, the surge in trading activity is a sign that investors are playing along with the rally, making the bullish hopes easier to believe.