The Polygon (MATIC) price has dropped considerably since the end of February. It invalidated a longstanding structure during its fall.
The readings from both long- and short-term timeframes are still bearish. In doing so, the downward tendency is expected continuation without a bounce.
Polygon Price Breaks Down From Long-Term Structure
The technical analysis from the weekly time frame implies that the Polygon tendency 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.
And, its breakdown is a decisively bearish sign, suggesting that the previous increase is finished. Often, such breakdowns mean that a new tendency in the other direction has now begun.
The weekly Relative Strength Index (RSI) is likewise 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 investment.
If the RSI reading is over 50 and the tendency is upward, bulls have an advantage, but if the reading is below 50, the opposite is true.
The RSI dropped below 50 in April (red icon), at the same time the price broke down. This legitimized the decrease, further suggesting that the longstanding tendency is bearish.
MATIC Price Prediction: Breakdown Can Accelerate Decrease
The technical analysis from the short-term six-hour time frame gives a bearish MATIC price forecast. It implies that the longstanding decrease will continue without a bounce. The 1st reason for this comes from the wave count.
The Elliott Wave theory, employed by technical analysts, involves the analysis of recurring longstanding price patterns and investor psychology to determine the direction of a trend.
The count implies that MATIC is as of now in wave four of this five-wave decrease. This is why, another fall 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.
Furthermore, the price trades in the lower portion of the channel, supporting the likelihood of a breakdown.
If one occurs, the possibly likely target for the lowest 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 likewise align with the longstanding $0.75 horizontal support area.
Regardless of the bearish MATIC price prediction, a movement over the short-term channel’s resistance line will mean that at least the short-term tendency is positive tendency.
In that case, the price can increase toward the closest resistance at $1.05. Nonetheless, this won’t be invalidate the bearish readings from the weekly time frame.
