Disclaimer: The information presented does not constitute financial, investment, trading or any other advice and is solely the opinion of the author
- The market structure of H4 and D1 has remained bearish
- A move above $1.25 would be necessary to turn the bias into bullish
Polygon [MATIC] recorded strong increases on price charts in mid-February, a development that showed that sentiment was positive towards the asset at the time. Since then, however, the market has turned and those gains have completely wiped out.
How much is 1, 10, 100 MATIC worth today?
The statistic of active addresses has also fallen since the end of January, while daily gas rates have fallen over the past two weeks. This hit to the protocol’s revenue could explain some of the losses MATIC has seen on the charts.
MATIC can be set to fill an imbalance in the south
After the strong drop in the demand zone, MATIC did not see a quick recovery. Instead, prices teetered around $1.15 and dipped lower again. The market structure on H4 was clearly bearish. The MACD has also been below the zero line since Feb. 22, showing significant downside momentum. However, it formed a bullish crossover on March 5, indicating that bearish momentum was weakening.
The A/D line has been moving sideways in recent days, emphasizing that neither buyers nor sellers had control over the market. And yet the price action signaled bears were clearly dominant.
There are two lower time frame levels of resistance and support at $1.18 and $1.09 respectively. Short-term traders can keep an eye on these levels, but it is likely that MATIC would drop to the $1 area.
Realistic or not, here is MATIC’s market cap in terms of BTC
On the daily chart, price had left a fair value (white box) gap in the $1.01-$1.06 area. Therefore, a move below $1.09 would likely fill this zone and also test the $1 psychological level. Aggressive traders can skip a short visit to the $1.15-$1.18 zone.
The Futures market also noticed strong bearish sentiment
On March 7, the funding ratio dropped to negative territory. At the same time, Open Interest started to rise alongside falling prices. This showed that short sellers were strong in the market. In the 12 hours before going to press, the funding rate turned positive again.
The recent drop in MATIC prices from $1.16 drove the OI down – also a sign of bearish sentiment as it discouraged buyers.