Polygon maintains $1 mark despite minor revisions! Will Bulls Trigger Another MATIC Price Spike?

Polygon (MATIC) is currently showing notable gains, with its value up 30% since last week. This upward trend has been triggered by bullish investors looking to hit this year’s high within the protocol. Nevertheless, as the price of MATIC approaches the $1 level, there is noticeable selling activity from investors. This situation raises potential concerns for traders and raises questions about whether this is a temporary market consolidation or a bull trap.

Exchange Reserves and Netflow suddenly decreased.

Polygon’s open interest (OI) has returned to a new high this year, surpassing $387 million. According to Coinglass, Polygon experienced a massive liquidation as the price approached $1. Recent data shows that MATIC has liquidated approximately $5 million in short positions and $5.2 million in long positions. This trend means that while sellers are closing their positions at a loss, buyers are selling their holdings for a profit, leveraging their investment as the price of MATIC reaches the $1 milestone.

But for many investors, MATIC’s $1 rise was seen as an opportunity to raise more money. As a result, both netflow and exchange reserves declined. Data from CryptoQuant shows a sharp decline in exchange reserves, which currently stand at around 1.1 billion MATIC.

Moreover, after MATIC surged to $1, Netflow turned negative, indicating that investors were withdrawing their holdings in anticipation of a rise in value. This accumulation trend suggests the possibility of a future price surge.

Nevertheless, as MATIC struggled to maintain positions above $1, inflows began to increase again, which caused Netflow to turn positive. This led to a fierce tug-of-war between buyers and sellers centered around the $1 mark.

What’s next for MATIC pricing?

MATIC successfully broke the key resistance level of $1 after buyers defended the $0.96 resistance level. However, MATIC has recently undergone a correction as sellers’ control has strengthened. At the time of writing, MATIC is trading at $1.05, a surge of over 17% from yesterday’s price.

Following this breakout, the bulls are maintaining buying pressure with the goal of sending the price to new highs. However, $1.2 is expected to meet significant resistance from sellers. If the bulls overcome this resistance and push the price above the fear zone, MATIC price will successfully gain the confidence of buyers. This bullish formation sets up a potential target around $1.6.

The downside is that the first support level is currently at $0.96, followed by the 20-day exponential moving average (EMA) at around $0.94. For the bearish momentum to accelerate and challenge the bullish trend, the bears would need to pull the price below the $0.85 level.