Here’s how MATIC traders can make the most out of this major breakdown


Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice.

Polygon MATIC’s recent bearish break below the $0.55-mark opened up shorting opportunities for traders. While the altcoin enters into a high volatility phase, the current structure exhibited strong selling tendencies.

The current pull below the four-month trendline resistance (yellow, dashed) brought MATIC back into its long-term bearish track.

At press time, MATIC traded at $0.425, down by 16.57% in the last 24 hours.

MATIC Daily Chart

Source: TradingView, MATIC/USDT

The 23.6% Fibonacci resistance curbed the bullish rallies for nearly a month. The recent reversal from this level opened doorways for a fall toward the 0.4-zone whilst the bulls dwindled.

After hovering at the Point of Control (POC, red) level for weeks, MATIC witnessed a down breakout from its squeeze phase. Due to its relatively higher correlation to Bitcoin, MATIC has struggled to propel a trend-altering rally over the last few months.

Should the current candlestick close below the $0.42-mark, the alt would lose its 13-month support only to confirm a further downside. In this case, potential shorting targets will rest in the $0.35-$0.39 range. The increasing trading volumes during the pulldown have further spiked the probability of an extended downfall. 

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To invalidate the default bearish tendencies, the bulls would need to steer the EMA ribbons toward the north before any conceivable chances of a robust revival.

Rationale

Source: TradingView, MATIC/USDT

The Relative Strength Index (RSI)’s rising wedge breakdown headed right into the oversold region on 13 June. A sustained close below the 30-31 range would heighten the chances of profitable bets for the short-sellers.

The MACD lines can be considered commensurate with a selling viewpoint after their recent bearish crossover. A convincing southbound movement from this forth would reaffirm the selling strength in the coming days.

Conclusion

MATIC’s sustained close below the $0.427-level could pave a path toward the lows of the $0.35-$39 range in coming sessions. Post this, the broader market sentiment would play a vital role in influencing the future trajectory.

On the flip side, any bearish invalidations would likely be short-lived by the four-month trendline resistance.

Moreover, investors/traders must keep a close eye on Bitcoin’s movement as MATIC shares a 68% 30-day correlation with the king coin.

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