MATIC falls to key 50% Fib support level – Is a recovery likely?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Price retracement saw MATIC drop to a critical price level.
- Short-term gains could be in the works for bulls, due to bulls’ advantage on long/short ratio.
Polygon [MATIC] failed in its attempt to flip its price action bullish on the higher timeframes. A 21% drop from the $0.8923 price level took MATIC to the 50% Fib level. The extension of the retracement saw MATIC erase its gains from the price pump on 13 July.
Read Polygon [MATIC] Price Prediction 2023-24
With Bitcoin [BTC] extending its range-bound formation between $29.2k to $29.5k, MATIC bulls could find buying opportunities hard to come by, unless the current level is defended successfully.
Can bulls rebound from the 50% Fib level?
Exploring MATIC’s price action considering the 12-hour timeframe revealed key price levels. The retracement from the $0.8923 level formed a higher low at the 23.6% Fib level ($0.8024) leading to a further price drop to the 50% Fib level ($0.7017).
A look southward showed that the 50% Fib level corresponded to a critical support level for bulls. Buyers rallied strongly from the level on 13 July with a 25% price pump. A retest of the level could produce similar results with the retracement easing at the 50% Fib level, as of press time.
While the Relative Strength Index (RSI) remained under the neutral 50, it registered a slight uptick to signal building demand. Also, the On Balance Volume (OBV) remained on an uptrend, despite a slight dip.
A strong bounce from the 50% Fib level would see bulls target take-profit levels at $0.8024 and $0.8923. However, if bulls can’t defend the level, sellers can break the higher low and target the $0.6568 (61.8% Fib) and $0.5927 (76.8% Fib) price levels.
Bulls capture a large portion of open contracts
How much are 1,10,100 MATICs worth today?
A look at the exchange long/short data from Coinglass on the four-hour timeframe revealed a 56.58% swing in favor of buyers. Such a large share of the open contracts for longs is likely to translate into short-term gains for MATIC. Thus, buyers can ride on the bullish sentiment in the futures market to register a strong rebound from the $0.7017 price level.