Polygon (MATIC) on a Rollercoaster Ride: From Yearly Highs to New Lows
Date: 2023-09-14 Author: Dima Zakharov Categories: BLOCKCHAIN, CRYPTO PAYMENTS
The Rollercoaster Ride of Polygon
Looking at the daily chart for MATIC, it's evident that bearish sentiment has dominated for a significant period. On February 28th, the price hit a yearly high of $1.57 and has since been on a downward trajectory along a descending resistance line. This decline led to a breach of the horizontal support area at $0.60, which was confirmed as resistance on August 29th.
This confirmation coincided with the last touch of the descending resistance line. After bouncing back, MATIC hit a new yearly low of $0.51 on September 10th.
Over the course of the existence of this trendline, MATIC has dropped by 67% in 208 days. If the decline continues, the next nearest support area to watch out for is at $0.34, which is 33% below the current price.
On the flip side, the nearest resistance area is at $0.84, which stands 63% above the current price.
RSI Provides a Glimmer of Hope
Despite the persistently bearish price action, the daily Relative Strength Index (RSI) offers hope for a bullish reversal. This momentum indicator is below the 50 mark but is showing signs of growth and has formed a rising low. Moreover, it exhibits bullish divergence (green line), where price decline is accompanied by momentum increase. This signal often leads to bullish trend reversals.
Wave Analysis Indicates MATIC May Find a Bottom
Meanwhile, wave analysis on the daily chart also reflects a bearish outlook but suggests that the token may find a bottom soon.
According to the most likely scenario, MATIC is in the fifth and final phase of the descending trend that began in February. The shape of the fourth wave confirms this interpretation.
The fourth wave was confined within the boundaries of an ascending parallel channel, a common occurrence during corrective movements. Additionally, the peak of the fourth wave briefly exceeded the horizontal level of $0.80 (red circle), which later turned into resistance.
If the descending trend continues, it is expected that MATIC's price will complete its fifth and final wave around $0.41, corresponding to the 1.27 Fibonacci external retracement level of the fourth wave. This target is above the key horizontal support at around $0.34.
The Future of Polygon (MATIC)
In conclusion, the most likely forecast is for MATIC to decline to the $0.40 level with a significant bounce afterward.
However, if the token manages to reclaim the $0.60 level, it would indicate that the bottom has been reached. In such a scenario, the price could rise by 63% toward the next resistance level at $0.84.
