Breakout or retracement – Where does MATIC head next?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Bearish momentum continued to limit MATIC’s bullish reversal.
- Open Interest declined by $15 million.
Altcoins continued to ride on the bullish wave created by Bitcoin’s recovery of the $30k price zone. A 2.2% increase over the last day saw the global crypto market cap stand at $1.2 trillion, according to Coinmarketcap. This underscored the bullish sentiment in the market.
Read Polygon [MATIC] Price Prediction 2023-24
Similarly, MATIC recorded a mild bullish rebound after falling to the July 2022 low of $0.5274 on June 10. However, it has failed to kick on significantly. What is in store for MATIC holders in the short term?
Strong selling pressure curtails bullish rebound
The descent to $0.5274 marked a new low for MATIC in 2023 with bulls unable to respond to the sustained bearish momentum since mid-February. Despite the recent low sparking a reaction from bulls, the strong selling pressure has limited the gains.
This has seen MATIC trade sideways over a three-week period. In the past 24 hours, buyers have used the lower Bollinger Band as a support structure on the four-hour timeframe. This has resulted in a 7.5% yield for bulls.
A continuation of this price rally could lead to a bullish breakout with the $0.7414 level a near-term target for buyers, especially if BTC sustains its upward trend. However, bulls must clear the $0.7000 hurdle to gain an edge.
Conversely, failure by bulls at the $0.7000 price zone could offer new selling opportunities for shorts with targets at $0.6000 and $0.5500.
Meanwhile, bulls can be encouraged by the RSI climbing above the neutral 50 with a reading of 56, as of press time. Similarly, the MACD posted a bullish crossover with a couple of green bars above the zero mark.
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Dipping Open Interest could limit further gains
Market speculators were hesitant to key into the recent price gains by MATIC. The Open Interest data from Coinalyze showed that the OI declined by $15 million over the past 48 hours. This highlighted the current lack of interest in the futures market.
Despite the declining OI, the Funding Rate has been positive over the past 24 hours and this could help bulls in their attempts for a significant price rally.