Why MATIC could extend its narrow price range
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- MATIC consolidated losses above $0.655.
- Buying volumes eased ahead of July US CPI data.
The crypto market recovered earlier in the week but slipped ahead of July US CPI (Consumer Price Index) data scheduled for Thursday (10 August). Bitcoin [BTC] led the recovery after an impressive jump from $28.7k to $30.2k. But BTC’s mid-week reversal saw Polygon [MATIC] stall at the overhead hurdle at 50% Fib level ($0.7).
How much are 1,10,100 MATICs worth today?
The Fed considers the US CPI data a key inflation metric during Fed rate decisions. So, whether CPI comes higher or lower than expected in July, the outcome will induce a little market volatility.
Key levels to consider ahead of expected volatility
A Fibonacci retracement tool (yellow) was placed between mid-July highs and June lows. The extended drop from mid-July has eased above 38.2 Fib level ($0.655). Put differently, MATIC consolidated losses above $0.655. That makes the $38.25 Fib a key support.
The early week upside didn’t cross the recent lower high at the 50% Fib level ($0.70). The subsequent retesting of the level as resistance could set MATIC to a range-bound extension ($0.66 – $0.70) ahead of July CPI data.
But bulls could only showcase strength when they flip 50% Fib level to support, which is highly unlikely, especially if BTC closes below the $29.5k range-low on higher timeframe (daily/weekly) charts.
Otherwise, a bearish breakout from the narrow price range of $0.66 – $0.70, especially if CPI data is higher than expected, could ease at the daily bullish order block and 23.6% Fib level ($0.6).
The positive readings from RSI and CMF at the time of writing underscored recent buying pressure and capital inflows.
Muted buying volumes
On the early Asian trading session on 10 August, MATIC’s buying volumes had eased to around 48% against a selling volume of 52%. It shows sellers gained little control and reinforces a short-term bearish sentiment ahead of July CPI data.
Is your portfolio green? Check out the MATIC Profit Calculator
However, BTC price action was a crucial variable worth considering. If bulls fail to defend the $29.5k, bears could consolidate the market further into the weekend. Unfortunately, any further upside above $30k could face a sharp reversal as most players locked in gains at the level.
So, a short-term range-bound extension for MATIC between 38.2% and 50% Fib level could be on the cards.