Are MATIC bulls privy to new buying opportunity?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- MATIC smashed the $0.7414 support level.
- Funding rate reversed sharply into negative territory.
Polygon [MATIC] descended to new lows, with the price sinking to the July 2022 support level of $0.5274 before temporarily retracing to trade at $0.5466, as of press time.
Read Polygon’s [MATIC] Price Prediction 2023-24
The Securities Exchange Commission (SEC) lawsuit continues to loom large over major cryptocurrencies, with MATIC no exception to the bearish effects of the regulatory crackdown.
With Bitcoin [BTC] also experiencing a 4% drop to $25.6k within the past 24 hours, MATIC could be primed for more losses.
No end in sight for bulls as MATIC continues free fall
A recent price report highlighted the possibility of a bullish reversal for MATIC from the $0.7500 price zone. However, price action over the past 48 hours saw MATIC smash through the $0.7414 support level, taking it to the July 2022 low of $0.5274.
The on-chart indicators suggested more price dips might be on the way. The Relative Strength Indicator (RSI) remained oversold and stood at 15, the lowest it has been in over a year. The Chaikin Money Flow (CMF) showed capital fleeing at massive rates with a reading of -0.20.
MATIC’s market structure and the press time sentiment in the crypto market favor more bearish activity. This could see bears clearing the $0.5274 support and subsequently targeting $0.3464.
Alternatively, a successful defense of the support level by bulls will invalidate the above thesis. This will present a much-needed opportunity to rally with bulls attempting to reclaim the $0.7414 level.
Negative funding rates highlighted shorts supremacy
A look at the funding rate data from Coinalyze on the 12-hour timeframe showed funding rates were consistently positive between 17 May and 9 June, as bulls defended the support level. However, the break of the support level saw the funding rate flip negative.
How much are 1,10,100 MATICs worth today?
This hinted at a massive decline in capital being deployed, with MATIC poised to continue along its bearish path.
The Spot CVD, which tracks trading volumes over time, also experienced a sharp decline after it had been on a gentle uptrend between 5 June and 9 June. This signaled waning buying pressure once again.