The MVRV ratio compares an asset’s market value to its realized value in order to assess if the asset’s price is overvalued or undervalued. Recently, the ratio dropped into negative territory, indicating that MATIC has entered the undervalued zone and is potentially poised for a rebound. It has been noted that the last two times the MVRV ratio dropped to this level, MATIC experienced significant price surges. In August 2023, the MVRV ratio slipped into undervalued territories when Polygon’s price fell to the $0.5 threshold.
As a result of this descent, the crypto asset attempted a recovery but faced resistance at the 50-day EMA ($0.648), leading to another slump. The ratio dropped again when Polygon fell from the $0.983 high and re-entered the undervalued zone in January 2018. Polygon extended its upsurge, reaching a 12-month high of $1.290 on March 13. However, a market-wide retracement triggered a subsequent decline in the MVRV ratio.
The ratio has now hit a low of -12.13, with its seven-day average value sitting at -11.35. Citing historical data, there is an expectation for a rebound in MATIC’s price, which currently hovers at the $0.9 territory. Since dropping to $0.860 on April 5, Polygon has recorded two consecutive days of gains. To achieve a rally above the $1 price territory, the crypto asset would need to breach crucial resistance levels at the 200-day EMA ($0.965) and the 50-day EMA ($0.984).
