Key Polygon takeaways:
- Polygon’s native token MATIC sits atop massive year-to-date profits despite its 60%-plus price crash.
- The token is now stuck inside a bearish triangle range.
- A breakdown from the said trading area risks crashing prices by 50%.
YEREVAN (CoinChapter.com) — A 16,300% MATIC price rally earlier this year made Polygon among the hottest digital assets to hold.
But then Elon Musk’s relentless anti-crypto tweets in May scared the weak-hearted bulls into selling their massively profitable MATIC holdings. The sell-off happened, extended, paused, and exhausted. But overall, the downside correction had crashed the MATIC price rates by as much as 62.86% as of this press time.
Related: Polygon set to back high-profile NFT venture as MATIC holds critical monthly support
Where does Polygon’s massively bullish token go from here? Let’s check out.
Support-cum-sleeping mattress
The MATIC price now trades just above $1.05, which coincides with the 78.6% Fib level of the Fibonacci retracement graph drawn from a swing low of $0.684 to a swing high of $2.422. The level earlier served as support in May and was a price ceiling during April’s bullish trading session.
The MATIC price has been sleeping on the level for almost all the June and ongoing July sessions. The cryptocurrency often slips lower but quickly retraces its way above $1.05 while dreaming about a breakout move above a price ceiling above. That resistance line comes in the form of a falling trendline level. Looking at the horizontal support and the falling trendline together, they form a Descending Triangle setup.
Descending Triangles are bad news during an uptrend, especially as the asset is correcting lower after topping out. For example, MATIC topped out at $2.89 on May 19, when the rest of the cryptocurrency market bled due to Elon Musk and China. But it soon posted a follow-up downside correction, which puts it at equal risk as any other digital asset at this moment.
Related: Elon Musk Caused Bitcoin Dump, But Hawkish Fed Minutes Could Accelerate It
So the triangle setup is simple: an asset trades inside the contracting price range but eventually breaks out of it to the downside. In doing so, the asset sets its bearish target by as down as the maximum Triangle height. In the MATIC price’s case, the size is $1.39. That is laughable because crashing by the said numbers would take the Polygon token below zero.
That said, even the technical setups have their limitations. The best guess is that there would be a bearish breakout, but its profit targets would be limited to levels with a history of serving as support or resistance. That brings the following line of support near the 0% Fib line of $0.68, with an extended decline shifting the burden of holding the bullish bias near the 200-day simple moving average (200-day SMA; the orange wave) — around $0.593.
For MATIC price bulls
A stabilizing Bitcoin price near $35,000 shows that bulls still could make a comeback. Since Bitcoin trends inspire altcoins a lot, MATIC could start tailing the flagship cryptocurrency’s rebound in the sessions ahead, if there is any. In that case, the MATIC market looks at the prospects of targeting the Fib levels provided in the chart above as upside targets.
Trade safe, homies!
