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- The order block and fair value gap indicated that MATIC could see a small rally to close the gap.
- The strength of the downtrend meant that traders should also be prepared for a drop below support.
On the lower timeframes, Polygon [MATIC] appeared to show some bullish momentum, but was accompanied by heightened volatility over the past two days. Analysis of the higher timeframes showed that the trend was overwhelmingly bearish.
Read Polygons [MATIC] Price Forecast 2023-24
This does not exclude a small increase in MATIC prices. The imbalance left by MATIC during its sudden plunge below $1 on May 8 could be tested again. How likely is such a scenario and should bears seize the opportunity in such a retest?
Will there be a shorter bull fall in the coming week?
Source: MATIC/USDT on TradingView
The strength of the downtrend since February has forced MATIC to lose level after level of support. However, every level from $1.3 has been retested. Not guaranteed to repeat, but suggested an upward move to $0.9-$1 before another downward move was not unlikely.
Both the OBV and RSI were in a bearish favour. The RSI showed a reading of 37, indicating strong downward momentum. It has been below the neutral 50 on the daily chart since mid-April, highlighting last month’s bearish trend.
The OBV had also been in decline since mid-April. Even in March, it didn’t rise by a significant margin despite MATIC rising from $0.94 to $1.24. From a price action perspective, an imbalance (white) and a bearish order block (red) were present in the $0.9-1.02 area. It was possible that a shorter rally to this area would be followed by rejection, which short sellers could capitalize on.
How much are 1,10,100 MATICs worth today?
Spike in dormant circulation points to a wave of sales
Source: Sanitation
On May 17, the 90-day dormant circulation surged to a two-month high. The funding rate also briefly dipped into negative territory in response to bear pressure. Still, MATIC failed to fall below the $0.84 support.
The funding rate has since been positive and the price has since risen by almost 3%, trading at $0.87 at the time of writing. An encouraging factor for buyers was the rising average coin age. This upward trend meant that MATIC bulls were actively building it. It remains to be seen if they can force a breakout past the $1 resistance, which is also a psychologically important area.