Polygon paints a 30% rebound rally amid crypto market retracement—is it a good buy?

Key Takeaways

• MATIC, Polygon’s native cryptocurrency, bounced back from its April-May support.
• However, the digital asset’s continued triangle breakdown indicates more downside risks.
• MATIC was in a downward trend during the last week, breaching its strongest support around $1

NEW DELHI (CoinChapter.com) — Polygon (MATIC) was part of a resurging crypto market as the digital asset registered its first green candle after nine back-to-back depressive days. MATIC prices rebounded off a price level that previously acted as support from April 28 to May 8. However, if the altcoin fails to consolidate at this price level, it risks falling to the next significant support at $0.44.

Beginning Of A Bull Run For MATIC?

MATIC price broke downwards from the descending triangle pattern on July 12.

A descending triangle is a bearish pattern that forms during a downtrend as a continuation pattern. Once prices broke below their lower trend line—which acted as support at the critical $1.00 level—they underwent a deeper downtrend, falling 41.41% from their July 12’s high of $1.059.

The support at $0.682 helped check MATIC’s falling prices.

Interestingly, the same support launched an upward rally in early May, which saw MATIC reach its record high of $2.89. Therefore, it now serves as significant technical support. In addition, the 200-Day (Violet) Moving Average trend line is acting as dynamic support here. If MATIC breaches below the 200-Day MA, that would indicate a price movement to the next support level at $0.442.

Also Read: MATIC extends decline below crucial support as forecasted, may drop further down to $0.4

$0.442 acted as resistance for MATIC between March 11 to April 25. A fall to the next support level will mean a decline of 46.7% from the current price. For now, the 20-Day Exponential MA acts as dynamic resistance for the cryptocurrency, which means immediate resistance for MATIC is at $0.90

$MATIC #Polygon bulls contemplate a comeback
Confirmation of an upswing will arrive after Polygon climbs above $0.90.
If the bullish momentum persists, $1 seems attainable in the short term. pic.twitter.com/hb8rabRvma

— RESEARCH 24/7 (@smallcappick) July 21, 2021

A U.K based crypto-analyst, RESEARCH 24/7, believes that once bulls help MATIC breach $0.90 resistance, the crypto will reach $1 soon. However, the digital currency is bearish in the short term, as prices trade below the 50-Day (Yellow) MA trend line. On the other hand, MATIC is still bullish long-term, as the 200-Day MA trend line highlights.

MATIC’s Momentum Indicators

The relative strength index for MATIC rebounded from its oversold position to reach 39.18, a relatively neutral value. RSI indicates the price momentum of an asset. A value below 30 means an asset is in the oversold region and ready for a trend reversal, which is what Polygon bulls are hoping this rebound is.

Also Read: Bullish Bitcoin indicator that sent prices from $11K to $65K flashes again.

Yet, MACD, a trend-based momentum oscillator, is still bearish for Polygon cryptocurrency. The MACD histogram remains negative, though the bars move towards zero, indicating that the MACD line (12-Day and 26-Day EMA difference) moves upwards towards the MACD signal line (9-Day EMA of MACD). Thus, it seems the MACD bear cycle may continue for a little while before turning bullish.

Recent Polygon Updates

Polygon is an interchain, Layer-2 scaling solution for Ethereum that aims to improve speed and reduce costs on its network. Recently, the blockchain firm announced its listing on Kraken, which made it available for trading in U.S, Canada, and Australia.

1/4 📢 We are excited to announce that $MATIC is now available to trade on @krakenfx for residents of the USA, Canada, and Australia.

📈 Trading for $MATIC has already been started!

🌐 Learn more: https://t.co/bU3YGThYWF pic.twitter.com/8EfwA1kUAj

— Polygon | $MATIC (@0xPolygon) July 19, 2021

Although the news hit the web on July 19, MATIC prices showed no reaction to the update. Then, on July 20, Polygon announced the launch of Polygon Studios, its new arm dedicated to blockchain gaming and NFTs. In its tweets, Polygon said its goal is to strengthen its position as the ‘de-facto platform for Decentralized Play to Earn and Blockchain Gaming.’

Although Polygon seems to be adding to its fundamentals, market sentiment for its cryptocurrency remains biased towards the Bears. However, a push from the bulls and consolidation of prices at the current support may fuel an upward trend for MATIC similar to the one that began on May 8, which saw prices gain by more than 300%.

At the time of writing, MATIC was trading at $0.839, up by 21.5% on the day.