Analysis
MATIC bulls face rejection at short-term resistance- what’s next?
The MATIC fall beneath the $1.05 support showed that bears were dominant, but it was also a retest of a higher timeframe support zone. Could this result in the formation of a range?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- The proximity of significant support and resistance showed MATIC could form a range in the coming days.
- The sellers continued to have the upper hand in the market and bulls can wait for a move above the highlighted resistance.
MATIC bulls were unable to hold on to the strong zone of support at the $1.05 region over the past week. On 21 April this area was tested as support but the buyers were quickly overwhelmed. Since then, MATIC went on to register losses of 8% on the drop to $0.95.
How much are 1, 10, or 100 MATIC worth today?
Bitcoin was able to defend the $27.8k support and hovered just beneath the $29k mark at press time. This was an encouraging development, but the altcoin market including Polygon’s token might not have sufficient demand to rally yet.
The resistance and support regions could see ping-pong price action just beneath $1
Source: MATIC/USDT on TradingView
There were two regions of imminent importance. One was the 4-hour bearish breaker at the $1.05 zone which has been retested as resistance over the past few days, highlighted in red.
The other was the bullish order block on the 12-hour timeframe at the $0.95 area, highlighted in cyan.
In the past week, the bearish breaker has rejected a bullish advance and led to a retest of the $0.944 support level. The market structure was bearish on both the H12 and H4 timeframes, and the recent volatility could have scared off both buyers and sellers.
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It was unclear if either side could force a breakout, but this gave rise to the possibility that MATIC could range between the $0.94 and $1.05 levels in the weeks to come.
Bitcoin would likely have a say in the direction of the altcoin market as well. The RSI showed strong bearish momentum at press time, and the CMF backed it up by underlining the heavy capital flow out of the market in recent days.
The falling development activity and mean coin age could spook investors looking to buy the dip
Source: Santiment
The MVRV ratio fell below zero, showing profit-taking activity has been strong. At the same time, the price has trended downward. Taken together it showed strong bearish sentiment from short-term MATIC investors and holders.
The mean coin age metric took a hit over the past few days, which showed increased token movement between addresses and was indicative of a rise in selling pressure.
Another factor that investors should be wary of was the sharp fall in development activity over the past ten days. Well, the metric has trended downward over the past month.
