$3.50 in Q4 as MATIC's 20% weekly gain triggers 'bullish flag pattern'

With its chart pattern starting to resemble a bullish flag, Polygon (MATIC) has the potential to reach $3.50 by the end of the year.

Specifically, a bullish flag is a bullish continuation pattern that occurs when prices consolidate after a strong move higher. In doing so, the price tends to move lower while leaving behind a string of higher lows and lower lows.

A breakout occurs when price closes at the flag's ascending trendline (or resistance). In other words, the price can rise as high as the height of the previous uptrend.

It appears that MATIC has been painting a similar pattern since it made a record high of $2.89 on May 17.

Therefore, if the price of MATIC breaks decisively above the resistance of the flag, it will shift the upside target to about $2 above the breakout level. This would roughly bring the price of the Polygon token to $3.5.

Retrace perspective

The bullish formation came as MATIC surged about 30% on Friday to a one-month high near $1.65.

Nonetheless, MATIC experienced a slight correction around the aforementioned peak levels, down around 4%, on the back of profit-taking sentiment among short-term traders. Moreover, as the correction occurred near the bullish flag resistance, this increased the possibility of further selling.

A pullback would expose MATIC to its first weekly support line, the 20-week exponential moving average (EMA) around $1.231. Meanwhile, further weakness could shift the downside target towards the 50-week EMA near $0.868.

bulls have the upper hand

In addition to the bullish flag pattern, MATIC has drawn a cup-and-handle pattern, presenting the possibility of MATIC hitting $1.80 soon.

Twitterati MK2 Trading first spotted the bullish reversal indicator on Polygon token’s daily price chart. It shows the price forming a rounded bottom (cup) after an upward move, and then draws a descending channel range (handle).

A trading range with subsequent breakout of the handle would signal a bullish continuation. In doing so, the price will rise towards the horizontal line for a length equal to the depth of the cup. Therefore, MK2 Trading expects MATIC to reach $1.80 in the next few sessions.

macro fundamentals

The latest round of buying in the Polygon market comes after Upbit, one of South Korea’s leading cryptocurrency exchanges, added the MATIC trading pair to its trading platform. Additionally, the exchange has listed Solana (SOL) and NuCypher (NU) trading pairs.

Solana was another standout on Friday, with its native token SOL surging more than 11.5 percent, while NuCypher’s NU jumped more than 845 percent on Friday following Upbit’s announcement.