Despite a long and harrowing downtrend, MATIC is showing signs of recovery.
It shows a surge in active addresses, and dormant coins are returning to circulation.
MATIC's price chart shows signs of a breakout from a descending wedge, which might indicate an upward trend.
The key price level to watch is $0.43, which is crucial for MATIC's recovery.
Potential Downward Movement: If $0.43 fails to hold, the cryptocurrency can hit $0.33.
Polygon’s MATIC hasn't been very bullish lately, with the cryptocurrency's current price significantly lower than its all-time high.
However, available data shows that a reversal might be brewing, as demonstrated by a sudden spike in on-chain activity.
This change in market dynamics has caught the attention of market analysts and sparked even more speculation about this $MATIC comeback around $4.3.
This week, Santiment's on-chain analytics platform highlighted an interesting increase in on-chain activity for the Polygon network.
The insights provider showed an increased uptick in active addresses and dormant coins returning to circulation.
This surge is also particularly interesting, given the ongoing price and network activity downtrend before late August.
The chart shared by Santiment showed a sharp increase in the movement of dormant tokens this week, along with the second-highest number of active addresses on the network throughout 2024.
This spike does much to show that a price reversal could be incoming for $MATIC soon.
Data from PolygonScan also shows that this decline in active addresses started around mid-2024 when the figures slipped by more than 50% from 1.6 million to a meagre 700,000 by the end of August.
The dump in active addresses
However, despite the ongoing signs of a market recovery, MATIC has dropped by around 55% YTD and is bearish on most timeframes.
But what if all that was about to change?
According to data from CoinMarketCap, MATIC isn't very impressive on the short timeframes either.
The cryptocurrency is down by around 4% on the daily and another 17% on the weekly.
A decline in MATIC
However, according to the charts, the cryptocurrency trades within a descending wedge, characterized by a period of downward consolidation and then a breakout to the upside.
MATIC’s price performance
According to the charts, MATIC broke out successfully from this formation on 19 August.
However, this breakout was short-lived, considering the cryptocurrency’s reversal and retest of the $0.43 zone.
The question now is: Will $0.43 hold?
According to the charts, the $0.43 zone held MATIC up within the wedge on 5 July and helped MATIC rebound by a staggering 250% in July 2022, all the way up to the $1.56 zone.
If this price level holds its ground again and we see a rebound, the resistance points to watch include $0.54, $0.7, $0.81, $0.93, and $1 before $1.29.
MATIC's support and resistance
Conversely, if $0.43 fails and MATIC declines, the $0.33 zone is the next most likely source of support for the cryptocurrency.
With this being said:
Support(s): $0.33
Resistances: $0.54, $0.7. $0.81, $0.93 and $1, $1.29.
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