MATIC: A likely short-squeeze or pullback next?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- The H4 market structure faced a key obstacle at $0.698.
- Open interest rates were low while selling volumes surged.
At the time of writing, Polygon’s [MATIC] recovery hit crossroads that should concern bulls. It bounced remarkably after dipping to $0.5089 on 10 June. But the recovery has hit a $0.6894 roadblock, which was previously a support in Q3 2022.
Read Polygon [MATIC] Price Prediction 2023-24
Although Bitcoin [BTC] reclaimed $30k at press time, it remained to be seen if the MATIC bulls would smash the $0.6894 roadblock and climb above a lower high of $0.7893 amidst improved market sentiment across the broader crypto markets.
Can bulls zoom past the $0.6894 and $0.7893 hurdles
On the 4-hour chart, the RSI and OBV registered sharp spikes denoting increased buying pressure and demand for MATIC. Hence, a cross above the $0.6894 resistance was likely if BTC maintained the $30k zone.
However, the H4 market structure will only flip bullish if MATIC pushes beyond the lower high at $0.7893. The level also aligns with a trendline resistance (white) and could exert short-term selling pressure, especially if BTC retraces from $30k.
Therefore, a short-squeeze could happen at the immediate resistance at $0.6894, especially if BTC maintains $30k and surges. But short-sellers could attempt another re-entry at $0.7893.
Any move above $0.7893 will confirm further solid bullish intent for MATIC, and the next target will be $0.9503 in such a scenario.
Open interest rates muted
Despite the strong bullish sentiment, MATIC’s open interest (OI) rates remained low. The OI refers to the total number of open contracts related to MATIC’s spot price at any given time.
Since the drop below $0.8, MATIC’s OI has remained muted below $150 million. A cross above $200 million will indicate strong bullish sentiment in the futures market.
How much are 1,10,100 MATICs worth today?
However, the exchange long/short ratio emphasized more traders were shorting the asset on the futures market at the time of writing.
Unless the spread between short and long positions decreases, short-term sentiment could remain mildly bearish in the futures market.