2023-05-04 18:16:00
Polygon (MATIC) is trying to make a bearish breakout from a long-term price structure. This jeopardizes all growth seen since the beginning of this year.
The daily time frame also gives bearish signals. As a result, in order to neutralize the bearish trend, the MATIC price needs an urgent bullish reversal.
Polygon may fall out of a bullish structure
MATIC is the native token of the Polygon network, a popular second layer scaling solution for the Ethereum blockchain. It helps reduce the cost and speed up transactions using sidechains. These are separate blockchains that operate independently of Ethereum but are connected to the main network. Polygon also helps to transfer decentralized applications (dApps) to a system of connected blockchains.
As the results of the technical analysis of the weekly chart show, the outlook for MATIC is bearish.
First, the price is trading inside an ascending parallel channel. This pattern is considered corrective, so its uptrend suggests that the broader currency trend is bearish and price will eventually break south out of this channel.
In addition, MATIC is trading at the bottom of this channel, further raising the possibility of a bearish breakout.
Secondly, the weekly Relative Strength Index (RSI) is bearish as it broke its trend line and dropped below 50. This index is a momentum indicator indicating the market is overbought/oversold, depending on whether it is above or below 50. he is in. In the case of Polygon, it indicates a bearish trend and, coupled with a decline in price, increases the chances of a bearish breakout.
The immediate support area is at $0.76 and the immediate resistance is represented by the $1.40 channel median line.
Does MATIC have any powers left?
The results of the analysis of the daily chart also confirm the signals of the weekly timeframe. Although the price has rebounded from the $0.95 horizontal support area, it is still moving along the short-term downward resistance line.
Together with the support area, this line forms a descending triangle, which is considered a bearish pattern.
As a result, a bearish breakout appears to be the most likely scenario. In this case, the price may fall to $0.76.
On the other hand, a rise in MATIC above the resistance level and a recovery above the support line of the previous channel will signal a bullish trend. In this case, the market might target the channel’s midline at $1.40.
Read also: BTC Forecast: What Investors Expect Amid Fed Rate Hike
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