MATIC price might pullback, but on-chain metrics indicate Polygon is due for 30% advance

• MATIC price is likely to retrace to the $1.435 support level after failing to reclaim the $1.726 resistance barrier.
• The retracement will allow bulls to recuperate for a new leg-up to $1.892.
• On-chain metrics indicate a steady growth of new users, supporting the bullish thesis.

MATIC price is contemplating a retracement after it failed to conquer a resistance barrier. This downswing will serve as a break for the bulls, allowing the sidelined investors to jump on the bandwagon and kick-start a new leg-up.

MATIC price eyes higher high

MATIC price rallied 33% after it retraced to $1.272 on August 18. While this upswing was impressive, it failed to slice through the $1.726 resistance level, leading to a consolidation that will likely evolve into a retracement.

The $1.435 stable support barrier is likely to absorb the selling pressure, allowing for the start of a new uptrend.

Although unlikely, in some cases Polygon might form a double bottom around the August 18 swing low at $1.272. Investors can expect a new rally to begin at $1.435 or $1.272 in either case.

The resistance level at $1.726 will be the first barrier the bulls need to shatter to indicate a new rally’s start. Following a breach of $1.726, MATIC price will retest $1.892, a roughly 32% upswing from $1.435.

MATIC/USDT 12-hour chart

IntoTheBlock’s Global In/Out of the Money (GIOM) model shows that MATIC price could not cross a resistance cluster ranging from $1.54 to $1.69. Here, roughly 13,800 addresses purchased 54.89 million MATIC tokens.

The inability of the buyers to resolutely conquer this price territory seems to have caused this short-term retracement.

However, this index also shows that nearly 18,200 addresses purchased 130.5 million tokens at an average price of $1.47, which will serve as a strong support level for restarting an uptrend.

Interestingly, this level approximately coincides with the area mentioned above.

MATIC GIOM chart

While a retracement seems inevitable, new investors joining the Polygon network appear to be on an uptrend. Over the past month, the number of daily new addresses increased from 2,200 to nearly 3,000.

This 36% increase indicates that market participants are interested in MATIC at the current price levels, which serves as a proxy to the inflow of capital, which paints a bullish picture.

MATIC daily new addresses chart

While things seem to be looking up for MATIC price, a breakdown of $1.435 will indicate weakness among buyers. If the bulls fail to set up a base around the August 18 swing low at $1.272, the upswing will be in jeopardy.

However, a breakdown of the $1.248 support barrier will invalidate the bullish thesis entirely. This move will open the path for a further downswing to $1.136.