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MATIC could rise toward opposite end of this range and investors should…

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Sharp MATIC price drop traps late bears, will it drive towards the highs to trap bulls as well?

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

MATIC dived toward $1.26, but its reversal was just as quick in recent hours. There was not sufficient demand to suggest that the bulls can drive further gains. However, a lot would depend on Bitcoin.

Bitcoin has a similar structure on its own lower timeframe charts, and could easily push toward the $42k and $45k supply areas. This in turn could see Polygon’s native token do well on the price charts, as sentiment in the crypto market often follows Bitcoin.

MATIC- 1 Hour Chart

Sharp MATIC price drop traps late bears, will it drive towards the highs to trap bulls as well?

Source: MATIC/USDT on TradingView

Over the past two and a half weeks, MATIC has been trading within a range (yellow) from $1.31 to $1.48, with the mid-point at $1.4. The previous day, MATIC dropped heavily beneath the $1.3 support level as bearish momentum intensified.

But, it was only a ruse to collect liquidity from late sellers, as the price reversed and made its way back above the $1.3 level and within the range. This suggested that the next week could see MATIC rise toward the opposite end of the range.

Forcing these short positions to close or liquidate, followed by a shift in momentum toward bullish, is likely to see MATIC climb to $1.4 and $1.48. On the way there, the $1.43-$1.45 area can act as a solid resistance zone as well.

Rationale

Sharp MATIC price drop traps late bears, will it drive towards the highs to trap bulls as well?

Source: MATIC/USDT on TradingView

The RSI climbed above the neutral 50 line and appeared to retest it as support at press time. The Awesome Oscillator also climbed above the zero line to show that the downtrend of the past three days has weakened or even ended.

However, the A/R line saw only a weak bounce and overall, it signaled strong selling pressure.

Conclusion

Even though the momentum indicators appeared to turn, there was not yet evidence of strong demand. Despite the lack of demand, it remains likely that MATIC climbs toward the $1.45 and $1.48 area in the next few days, provided Bitcoin stays above the $39.8k area.

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Akashnath Sumukar works as a Senior Journalist at AMBCrypto. Based in Chennai, India, he has been an avid follower of the cryptocurrency market since Bitcoin’s boom and bust cycle of 2017. A graduate in Chemical Engineering, he is an expert in technical analysis. In fact, Akashnath has a particular interest in reading price charts and predicting how an asset will move over the short and long term. A self-taught trader and as someone who holds cryptos himself, he is always on the lookout for the next opportunity he can possibly capitalize on, while also educating his audience.
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