The price of Polygon (MATIC) may sink another 10% before rebounding
Date: 2023-08-13 Author: Karina Ziganova Categories: BLOCKCHAIN
The price of the native L2 blockchain token Polygon MATIC failed to break above the important horizontal resistance area and then exited the short-term parallel channel.
The weekly and daily timeframes are bearish, hinting at a continuation of the already protracted correction.
The price of Polygon ran into serious resistance
Technical analysis of the MATIC weekly timeframe gives a bearish forecast. This is due to the recent failed attempt to break through the important $0.80 horizontal resistance area and the formation of a long upper wick, which indicates selling pressure.
This resistance line acted as a support support for more than a year. Thus, the trend can be considered bearish as long as the price is trading below it.
The weekly Relative Strength Index (RSI) also signals a continuation of the correction. At the moment it is below 50 and continues to fall.
MATIC has left the ascending channel
The readings of the daily timeframe are consistent with the weekly timeframe, confirming the bearish scenario. This is due to the fact that the price of MATIC has exited the ascending parallel channel that has existed since June 10th. Simultaneously with the breakdown, the RSI also dropped below 50.
Polygon is currently trading just above the 0.618 Fibonacci retracement level (marked with a green icon on the chart). The principle behind Fibonacci retracement levels suggests that after a significant price movement in one direction, it will partially return to the previous support.
If the decline is corrective, the 0.618 level most often acts as a bottom. In that case, MATIC could drop another 10% to $0.60 before rebounding towards the rising channel support line at $0.80.
