2023-7-13 14:00 |
The Polygon (MATIC) price broke out from a 140-day resistance line but has not followed the breakout with a significant upward movement.
Long- and short-term readings are not in agreement with each other. While the daily time frame shows a decisive breakout, the short-term outlook suggests a breakdown will occur instead.
Polygon Price Breaks Out From 140-Day ResistanceThe daily time frame technical analysis for MATIC gives a bullish outlook. The main reason for this is the fact that the price broke out from a descending resistance line that had been in place for 140 days.
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Breakouts from such long-term levels mean that the previous movement is done, and a new one has begun in the other direction.
Despite the breakout, MATIC has now yet initiated a significant upward movement. Rather, it trades very close to its pre-breakout level.
MATIC/USDT Daily Chart. Source: TradingViewThe weekly Relative Strength Index (RSI) is also bullish, legitimizing the breakout. With the RSI as a momentum indicator, traders can determine whether a market is overbought or oversold and decide whether to accumulate or sell an asset.
Bulls have an advantage if the RSI reading is above 50 and the trend is upward, but if the reading is below 50, the opposite is true. The RSI is below 50 (red icon) and declining, indicating a downward trend.
The indicator moved above 50 when the price broke out from the line. Therefore, it supports the possibility that the MATIC price has begun a new bullish trend.
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MATIC Price Prediction: Key Level Determines Trend’s DirectionWhile the daily time frame is decisively bullish, the short-term six-hour time frame casts some doubt on the legitimacy of the previous breakout.
While the MATIC price has increased since June 10, it has done so inside an ascending parallel channel. This is considered a bearish pattern, meaning that an eventual breakdown from it is likely.
Furthermore, the MATIC price was rejected by a confluence of resistance levels (red circle) on July 12. The channel’s resistance line and the 0.5 Fib retracement resistance level create the resistance.
The principle behind Fibonacci retracement levels suggests that after a considerable price movement in one direction, the price will return partially to a previous price level. So, the failure to move above 0.5 Fib suggests that the upward movement is corrective, and a breakdown will occur.
If the MATIC price breaks down from the channel, it will likely fall to its June 10 lows at $0.51.
MATIC/USDT Six-Hour Chart. Source: TradingViewDespite this bearish short-term MATIC price prediction, a breakout from the $0.74 resistance area and the channel will mean that the trend is bullish. The MATIC price can move to the closest resistance at $0.90 in that case.
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For BeInCrypto’s latest crypto market analysis, click here.
The post Polygon (MATIC) Price Poised to Surpass $1, Pending Key Breakout appeared first on BeInCrypto.
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