2023-5-25 22:00 |
The Polygon (MATIC) price has decreased considerably since the end of February. It invalidated a long-term structure during its fall.
The readings from both long- and short-term timeframes are still bearish. As a result, the downward trend is expected to continue without a bounce.
Polygon Price Breaks Down From Long-Term StructureThe technical analysis from the weekly time frame suggests that the Polygon trend is bearish. There are two main reasons for this.
The most important one is the breakdown from an ascending parallel channel in April 2023. Before the breakdown, the channel had been in place since June 2022.
So, its breakdown is a decisively bearish sign, suggesting that the previous increase is finished. Often, such breakdowns mean that a new trend in the other direction has now begun.
MATIC/USDT Weekly Chart. Source: TradingViewThe weekly Relative Strength Index (RSI) is also bearish. By using 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.
If the RSI reading is above 50 and the trend is upward, bulls have an advantage, but if the reading is below 50, the opposite is true.
The RSI fell below 50 in April (red icon), at the same time the price broke down. This legitimized the decrease, further suggesting that the long-term trend is bearish.
MATIC Price Prediction: Breakdown Can Accelerate DecreaseThe technical analysis from the short-term six-hour time frame gives a bearish MATIC price prediction. It suggests that the long-term decrease will continue without a bounce. The first reason for this comes from the wave count.
The Elliott Wave theory, employed by technical analysts, involves the analysis of recurring long-term price patterns and investor psychology to determine the direction of a trend.
The count suggests that MATIC is currently in wave four of this five-wave decrease. Therefore, another drop will complete this portion of the correction.
The second reason comes from the presence of an ascending parallel channel. As outlined in the weekly time frame, such channels usually lead to breakdowns.
Moreover, the price trades in the lower portion of the channel, supporting the possibility of a breakdown.
If one occurs, the most likely target for the bottom will be near $0.77. The target is found by the length of wave one (white) and the 1.61 external Fib retracement of wave four (black). This will also align with the long-term $0.75 horizontal support area.
MATIC/USDT Six-Hour Chart. Source: TradingViewDespite the bearish MATIC price prediction, a movement above the short-term channel’s resistance line will mean that at least the short-term trend is bullish.
In that case, the price can increase toward the closest resistance at $1.05. However, this will not invalidate the bearish readings from the weekly time frame.
For BeInCrypto’s latest crypto market analysis, click here.
The post Polygon (MATIC) Price Prediction: Reversal or Further Decline? appeared first on BeInCrypto.
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