Polygon drops to January levels; here are key areas to consider
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
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- MATIC breached a key Q1 2023 support zone of $0.9172 – $0.9498.
- Monthly holders suffered over 10% loss.
The macroeconomic headwinds continue to hammer crypto markets hard. But the intensity seems overwhelming for Polygon [MATIC] after it dropped to January levels, clearing most Q1 2023 gains.
At press time, MATIC traded at $0.8582, way below its Q1 2023 threshold support zone of $0.9172 – $0.9498. Similarly, Bitcoin [BTC] was firmly below $27.5k, at the time of writing, which could exert more downward pressure on lower timeframe performance.
How much are 1,10,100 MATICs worth today?
Down to January levels – Will bulls come through?
On the 4-hour chart, the RSI was in the oversold zone with a value of 24 at press time – an extremely bearish position. But OBV fluctuated in the past two weeks, undermining a strong recovery.
The breach of the support zone (cyan) made sellers aggressively sink MATIC below $0.8712. Sellers could continue decelerating MATIC to lower support levels at $0.8140 or $0.7514 if the bearish sentiment persists in the coming hours/days.
Alternatively, MATIC could attempt to rally and close above the support zone, especially if BTC reclaims $28k and surges. But the rally could stall near the recent high of $1.000 on 4 May.
Monthly holders in red
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MATIC’s 30-day MVRV (Market Value to Realized Value), which measures holders’ short-term profit/loss, is at -13% deep. It indicates MATIC monthly holders were at a loss, and the altcoin was undervalued.
In addition, sentiment has remained negative since mid-April, underscoring bears’ upper hand. In addition, the funding rate was negative at press time – further tipping the scale in favor of sellers.
However, if BTC reverses recent losses, it will pull MATIC and offer bulls reprieve.