The analyst explained how Polygon can expect an enhance of around 17% if the cryptocurrency’s price exceeds this level.

A parallel channel can reveal what might come next in the case of a polygon

IN post in X, analyst Ali discussed the parallel channel where Polygon has been consolidating over the past few weeks. A “parallel channel” here refers to a technical analysis (TA) pattern that is drawn using two parallel trend lines.

The top line of this pattern connects the asset’s successive highs, while the bottom line connects the bottoms. Although price is in the region bounded by these two lines (the “channel”), it will likely remain trapped there, only consolidating sideways.

Naturally, retests of the top line could possibly result in a reversal of the downtrend, while the bottom line could act as a source of support, helping the coin bottom out and return to the uptrend.

There are different types of parallel channels in TA such as ascending and descending channels, where the channel is inclined upwards or downwards.

In the context of the current topic, however, what is captivating is the parallel channel, parallel to the time axis. This means that consolidation in this channel is occurring between the same upper and lower levels.

As with other forms of consolidation in TA, a break of the parallel channel trendline may also suggest a continuation of the trend in this direction. More specifically, a rise above the pattern may suggest bullish momentum for the asset, while a drop below the channel may instead indicate a bearish outcome.

Here’s a chart showing what the parallel channel where Polygon has been consolidating has looked like over the past month:

From the chart above, you can see that Polygon has been stuck consolidating in this parallel channel since the cryptocurrency crash last month.

The asset has made some attempts to reach higher levels, but so far they have all failed and the coin has not been able to find any breakout. MATIC is currently close to this level, so another retest may occur soon.

If Polygon’s price rises above the channel this time, it could enjoy a continued uptrend. “A break above $0.76 could trigger a 17% rally, pushing USDMATIC to $0.88!” Ali notes.

This price target is based on the fact that last month’s crash, which necessitated asset consolidation, occurred around this level. With a potential retest of the channel’s upper line in mind, it remains to be seen how the cryptocurrency will perform in the coming days.

MATIC price

Yesterday, Polygon almost touched the upper channel level of $0.76, but since then the coin has seen a pullback and is currently back at $0.72.

Featured image from Shutterstock.com, charts from TradingView.com