A bearish breakout from this pattern would confirm that the trend on MATIC is bearish, and price could mark new lows soon.
YouTube feed
.
Polygon has stumbled into horizontal resistance
According to technical analysis of the weekly chart, the outlook for MATIC looks bleak. The main reason for this is the price bounce from the horizontal resistance area of $0.80. This area has provided support for the coin since July 2022 and has turned into resistance in the last two weeks.
The price formed a long upper wick (red icon) during the rebound. This is a sign of pressure from sellers as buyers have been unable to push the price up. Instead, sellers took over, sending MATIC below the resistance area.
Sellers took over, sending MATIC below the resistance area.
Source: TradingView
In addition, the weekly relative strength index (RSI) is indicative of negative sentiment. This momentum indicator is below the 50 mark, which is a sign of a bearish trend.
MATIC forecast: a bearish breakout could accelerate the decline
Like the weekly timeframe, the daily chart is also giving bearish signals. Their main reason is the presence of an ascending parallel channel, which is considered a bearish pattern. Therefore, the most likely scenario for further developments is a bearish breakout from the channel.
.
In addition, MATIC is trading in the lower part of this channel, which further increases the probability of a bearish breakout.
The daily RSI, however, is not yet confirming the bearish trend. Although the indicator is declining, it is still around the 50 mark, indicating a rebound is possible.
The indicator has been declining for a while now.
If a bearish breakout does occur, the next closest support will be at $0.60.
.
Source: TradingView
Despite the bearish outlook, a MATIC bounce from the channel support line would indicate that the trend has turned bullish. In this case, price could move toward the channel resistance line at $1.