How MATIC traders can make the most out of this pattern’s break

Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice.

MATIC’s bearish break below the $1-mark has exposed the alt to fresher multi-monthly lows over the past month. The recent patterned break has been struggling to topple the 23.6% Fibonacci resistance on the daily timeframe.

The broader liquidations aided sellers in pulling MATIC below the four-month trendline resistance (yellow, dashed). A close beyond the $0.398-$0.42 range is critical towards affirming decent bullish revival chances.

Because of the relatively high correlation with Bitcoin, the altcoin could see bullish invalidations. At press time, MATIC was trading at $0.396, up by 12.54% in the last 24 hours.

MATIC 4-hour Chart

Source: TradingView, MATIC/USDT

From a near-term perspective, MATIC saw a morning star setup after breaking out from the falling wedge (white). Whilst finding a close beyond the 20 EMA (red), the price action has been struggling to overturn the bounds of its 50 EMA (cyan).

A compelling close beyond the $0.4-level could aid near-term buying efforts to test the $0.45-zone in the coming sessions.  

MATIC Daily Chart

Source: TradingView, MATIC/USDT

Over a rather longer timeframe, MATIC is striving to break above the bonds of the 23.6% Fibonacci level. Any close above this level would expose the alt to an upside towards the 38.2% level and the four-month trendline resistance. Thus, the potential targets would lie in the $0.44-$0.49 range.

However, an analysis of the breakout day volumes revealed an unpleasant picture for the bulls. With decreasing trading volumes, the 24-hour gains could not depict a strong bull move.

Hence, reversals from the 23.6% level could lead to a retest of the $0.33-$0.35 14-month support range.

Source: TradingView, MATIC/USDT

The Relative Strength Index (RSI) found a close above the 31-mark support as the bulls endeavored to protect the alt’s long-term support. Sustained recovery from here would aid the buyers to ease the selling pressure in the coming days.

Post a bullish divergence on the CMF with the price, the buyers gained enough thrust to reject lower prices and test the 23.6%-level.

Conclusion  

Considering the bullish candlestick pattern on the H4 alongside the patterned break and CMF’s bullish divergence on the daily timeframe, ETH had chances to test the 38.2% level. The targets would remain the same as mentioned above. 

Any bullish invalidations should likely find a rebounding region in the $0.33-$0.35 range. Also, investors/traders must keep a close eye on Bitcoin’s movement as MATIC shares a whopping 98% 30-day correlation with the king coin.