Polygon experienced a drop below its resistance level
Since November 2023, the daily timeframe indicates that MATIC has been trading below the $0.95 horizontal resistance zone.
In December, the price briefly surpassed this level (marked with a red circle) but quickly fell back below it. This rendered the bullish breakout as a price deviation. Recently, the resistance zone has caused MATIC to rebound three times (marked with red icons). After the last bounce, MATIC returned to the ascending support line.
Source: TradingView
The daily RSI momentum indicator is showing negative signals, with a decline below the neutral level of 50. This indicates a bearish trend.
Contrary to the price and RSI dynamics, there is positive news about the Polygon project. According to the Electric Capital report, Polygon attracted the second-highest number of new developers (6,208) in 2023, second only to Ethereum.
MATIC forecast: How long will the decline continue?
The price performance over the past five months indicates a bearish outlook, as suggested by Elliott wave analysis.
The most probable wave scenario suggests that MATIC has completed a five-wave upward movement (marked in black) and has entered an ABC correction phase. If this is indeed the case, the price is currently in wave C of this correction.
The horizontal support zone at $0.63 could potentially serve as a level for bottom formation, which is 20% below the current MATIC price.
Source: TradingView
On the other hand, if the price surpasses the high of wave B (marked in red) at $0.96, it would indicate that the local bottom has already been reached. In this scenario, MATIC could see a rise of nearly 37%, reaching a high of $1.10 in December 2023.
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