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

• 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?

Source: MATIC/USDT on TradingView

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

Source: Santiment

Is your portfolio green? Check MATIC Profit Calculator 

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.

Source: Santiment