The MVRV ratio is a metric that compares an asset’s market value to its realized value in order to determine if the asset’s price is overvalued or undervalued. Recently, this ratio has dropped into negative territory for MATIC, indicating that it has slipped into the undervalued zone and is potentially set for a rebound.
Historical data shows that the last two times the MVRV ratio dropped to this level, MATIC experienced significant price surges. In August 2023, Polygon’s price dropped to the $0.5 threshold, leading to a subsequent recovery attempt and another slump.
Similarly, the ratio dropped again when Polygon fell from the $0.983 high, re-entering the undervalued zone in January. Following a market-wide retracement, the MVRV ratio has hit a low of -12.13, with a seven-day average value of -11.35.
Based on this historical data, Wise Advice expects a rebound in MATIC’s price, which is currently around the $0.9 territory. Since dropping to $0.860 on April 5, Polygon has seen two consecutive days of gains.
For a rally above the $1 price territory, Polygon would need to breach the crucial resistance levels at the 200-day EMA ($0.965) and the 50-day EMA ($0.984).
