MATIC pullback threatens recent gains – Can bulls contain it?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Attempt to cross $0.90 was derailed.
- The weekend’s sell pressure eased slightly.
The short-term sell pressure over the weekend (15/16 July) exposed Polygon [MATIC] to a 10% drop. The pullback saw MATIC erase part of recent gains secured during the price pump on 13 July (last Thursday).
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But the retracement hit the previous support and December lows near $0.7566 and could attract bulls. In the meantime, Bitcoin [BTC] extended its range-bound formation and was yet to cross the mid-range of $30.5k at the time of writing.
Can bulls defend the December low?
Since mid-June, the 4-hour chart printed higher highs and higher lows, denoting an uptrend. Although the massive price pump on 13 July pushed bulls forward, they failed to cross the $0.90 mark.
In fact, MATIC was close to reversing all June losses before faltering below the D1 bearish order block (OB) of $0.918 – $0.955 (red). It was worth noting that the massive pump on 13 July invalidated another bearish OB (red), which aligned with the December lows near $0.7566.
But the pullback eased to the above level – December lows, a crucial support that could attract bulls. A rebound at the level could set aggressive bulls on a $0.95 target (overhead bearish OB). But conservative players could reach the $0.889 and $0.85 targets.
A breach below the December lows will invalidate the bullish thesis. Such a downswing could set MATIC to drop towards $0.71 or $0.65.
Meanwhile, the On Balance Volume dropped slightly while the Relative Strength Index slid below the neutral level – reinforcing the drop in demand and buying pressure over the weekend.
Sentiment improved significantly, but …
Investors’ confidence in MATIC tanked after US SEC classified it as security in early June 2023. However, with Ripple Labs’ landmark ruling, sentiment has improved since then, further shoring up confidence, as shown by improved weighted sentiment.
How much are 1,10,100 MATICs worth today?
The upswing on 13 July was marked by a spike in Supply in Exchanges, underscoring the short-term sell pressure as players lock short-term profits near $0.89.
In addition, funding rates fluctuated in the same period, further tipping the balance in favor of short-sellers. But, the December low near $0.7566 was a key level to watch.