On February 3rd, Monday, the crypto market witnessed a sharp surge in volatility as the long-squeeze scenario plunged the Bitcoin price to $91,200 before reclaiming $100k. According to CoinGlass data, 520,687 traders were liquidated in the last 24-houts which triggered a total liquidation of $1.74 billion. Amid the market fluctuation, the Polygon price showed resilience above $0.29 support, with potential for bullish recovery amid a reversal pattern.
Key Highlights:
- The formation of a double bottom pattern sets Polgon price or 125% potential surge
- A positive divergence in the daily Relative strength index (RSI) hints at a bullish recovery ahead.
- Onchain data indicate that the anticipated rally in the POL coin could hit major resistance at $0.364 to $0.509.
Double Bottom Formation Hints Major Reversal
In the last two months, the Polygon price showcased a notable correction from $0.77 to $0.24, accounting for a loss of 68.7%. Consecutively, the asset’s market cap plunged to $2.97 Billion, and 24-hour trading volume was recorded at $404.
However, the POL price is experiencing a renewed demand pressure at $0.29 support, evidenced by the long-tail reject candle. In addition, the daily RSI chart shows an elevated slope from its last swing, accentuating the increasing bullish momentum.
This second reversal set up within three months shows the formation of a well-known reversal pattern called double bottom. Theoretically, the chart pattern resembles a W-shaped structure, indicating active accumulation from buyers at bottom support.
If the pattern holds true, the Polygon price should rise 125% before even challenging the key neckline resistance of $0.77.
Polygon Price Faces Critical Support Test Amid Sell-Off Risks
On-chain data shared by crypto analyst Ali Martinez reveals that the majority of Polygon (POL) tokens were accumulated within the price range of $0.364 to $0.509. This accumulation zone now stands as a crucial resifor the asset.
According to Ali, reclaiming this zone is vital to prevent further downside pressure. Failure to hold above this key range could trigger another wave of sell-offs as investors rush to minimize their losses.
Also Read: TVM Venture Launches $100M Fund to Expand TON Blockchain
