MATIC: This support zone could be key to sustaining bullish narrative
Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice.
Over nearly two months, Polygon [MATIC] bulls have been on the front foot as they established the altcoin’s position beyond the 20/50 EMA. This recovery initiated a critical bullish crossover on the 20 EMA (red) and the 50 EMA (cyan).
The breach of the four-month trendline support (previous resistance) gave the bulls enough firepower to retest the $0.95-ceiling. A convincing close below the pattern could expose the crypto to a near-term downside in the coming sessions.
At press time, MATIC was trading at $0.908, down by 2.34% in the last 24 hours.
MATIC Daily Chart
The ongoing ascending channel (white) trajectory revealed the underlying uptick in bullish pressure. As a result, the broader outlook started to shift slightly in favor of the bulls.
Alas, with the 200 EMA resistance coinciding with the $1.04-$0.95 range resistance, MATIC could see a stiff hurdle in the coming sessions.
On the flip side, empirical bullish crossovers on the 20/50 EMA have ensured near-term support in the 20 EMA zone. So, the alt could continue its compression in the $0.74-$1 range before committing itself to a trend.
A decline below the up-channel could trigger a near-term decline towards the $0.74-level before a likely reversal. An eventual close above the $1.04-level can provoke a test of the upper trendline of the up-channel before a pullback.
Rationale
The Relative Strength Index (RSI) ensured its position above the midline to depict a slight buying edge. A sustained position above the 58-mark support could continue supporting near-term buying inclinations.
Furthermore, the Chaikin Money Flow’s (CMF) decline below zero highlighted a selling advantage. Even so, it marked lower troughs over the last two weeks and bullishly diverged with the price action.
The Volume Oscillator (VO) was on a steep downtrend as the trading volumes took a sharp plunge over the last few days. A potential uptick in the volumes could help the alt break away from its low volatility phase.
Conclusion
MATIC’s sway above its 20/50 EMA ribbons reflected a near-term bullish advantage. A rebound from the lower trendline of the up-channel could encourage a bull run before a pullback.
However, a drop below this reversal pattern could entail a short-term decline. The targets would remain the same as discussed above.
Finally, investors/traders must keep a close eye on Bitcoin’s movement as MATIC shares a staggering 86% 30-day correlation with the king coin.
