Push towards $1 triggers rare buy signal for MATIC MVRV ratio
Market data indicates that there may be a forthcoming surge in the price of Polygon (MATIC), as its 30-day MVRV (Market Value to Realized Value) ratio is signaling a unique buying opportunity.
Crypto analyst Wise Advice drew attention to this metric, referencing data presented by market expert Ali Martinez. The MVRV ratio compares the market value of an asset to its realized value, aiming to determine if the asset is over or undervalued.
The ratio recently entered negative territory, suggesting that MATIC has slipped into the undervalued zone and is poised for a rebound. Wise Advice highlighted that the last two times the MVRV ratio dropped to this level, MATIC experienced significant price surges.
In August 2023, the metric reached undervalued levels when Polygon’s price dropped to $0.5. Following this decline, the crypto asset attempted to recover but faced resistance at the 50-day EMA ($0.648), resulting in another slump.
However, after hitting a floor of $0.493 in September 2023, MATIC embarked on a bullish rally, surging to a high of $0.983 on November 14, 2023. Nevertheless, the MVRV ratio dropped again when Polygon fell from this high, eventually re-entering the undervalued zone in January of this year.
As anticipated, the decline in the MVRV ratio preceded another impressive price rally for MATIC, with the token surpassing the $1 mark on February 18 for the first time in over a month. Polygon continued its upward trend, reaching a 12-month high of $1.290 on March 13.
The recent market-wide retracement caused a drop from this high, leading to a subsequent decline in the MVRV ratio. As a result, the ratio has now reached a low of -12.13, with an average value of -11.35 over the past seven days.
Referring to historical data, Wise Advice predicts a rebound in MATIC’s price, which currently stands at around $0.9. The asset is already showing signs of recovery as the broader market seeks to recover from recent losses. Since dropping to $0.860 on April 5, Polygon has recorded two consecutive days of gains.
At the time of writing, MATIC is up 1.75% in the past 24 hours and is trading at $0.928. To achieve a rally above the $1 price level, the crypto asset will need to surpass key resistance levels at the 200-day EMA ($0.965) and the 50-day EMA ($0.984).
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