MATIC traders can watch out for a retest of this level to sell the token
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Polygon investors can wait for the trend to shift bullish before buying, and that could take a while.
- MATIC traders have the $0.56-$0.6 region to focus on, and rejection from this resistance would embolden short sellers.
Bitcoin [BTC] traded at the $26k mark over the weekend. It has a strongly bearish bias on the price chart after the wave of selling seen earlier this month. This saw many altcoin prices, including Polygon [MATIC], tumble.
Read Polygon’s [MATIC] Price Prediction 2023-24
MATIC bulls remain weak and the price action indicated that more downside was likely. Yet, there was an attractive liquidity pocket northward. Will we see a brief respite in the bearish pressure this week?
MATIC showed an imbalance near $0.6 but no sign of wanting to fill that void yetThe 1-day price chart above showed the market structure was firmly bearish. To flip it bullishly, MATIC would need to breach the most recent lower high at $0.588 by closing a daily trading session above this mark. A look at the lower timeframe charts such as 4-hour and 1-hour indicated this was not likely yet.
The structure and momentum leaned in favor of the sellers on the lower timeframes. A move above $0.571 would be needed to flip this bias- but the higher timeframe bearish pressure meant any move higher would likely be short-lived. The daily RSI and OBV both supported this notion.
The RSI showed hefty downward momentum with a reading of 28 at press time, and the OBV was in a sharp decline throughout August. Hence, both the $0.56 and the fair value gap (white) at $0.6 will present a selling opportunity upon a retest.
The 23.6% Fibonacci extension level at $0.4 presented a bearish target for MATIC in the weeks to come. It has confluence with a demand zone from the weekly timeframe that stretched from $0.316-$0.5.
The speculators remained sidelined in the futures market as MATIC prices lacked a short-term trendOver the past five days, MATIC has traded between $0.537 and $0.56 for the most part and saw lowered volatility. In turn, this led to a drop in the Open Interest over the past week.
It signaled speculators lacked conviction in the direction of the next move, and that traders might need to be patient.On the other hand, the long-term data from Santiment showed some bullishness.
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The mean coin age was on the rise to show the accumulation of MATIC across the network. Supply on exchanges also fell over the past week, once again signaling the withdrawal of the token and accumulation.
The price action is generally more reliable than on-chain metrics. Until we see a strong sign of bullish strength on the price chart, MATIC traders can continue to lean bearish.