The Polygon (MATIC) rate has been losing ground since February and reached the support of a long-term pattern, which has been holding back the price since June 2022
A bearish break of the long-term bullish structure will be a negative signal for MATIC. Will the price manage to defend this pattern and bounce against the backdrop of bearish indicators?
Polygon sank to an important support
MATIC is the native token of the Polygon network, a popular second layer scaling solution for the Ethereum blockchain.
It helps reduce the cost and speed up transactions using sidechains. These are separate blockchains that operate independently of Ethereum but are connected to the main network.
Polygon also helps to transfer decentralized applications (dApps) to a system of connected blockchains.
As the results of the technical analysis of the weekly chart show, the outlook for MATIC looks bearish.
First, the price is trading inside an ascending parallel channel. Such patterns are considered bearish and promise a bearish breakout for the coin. The price is at the bottom of the channel.
Polygon (MATIC) Price Long-Term Movement
Secondly, the relative strength index RSI is also giving bearish signals. This index is a momentum indicator indicating whether the market is overbought/oversold, depending on whether it is above or below the 50 mark.
In the case of MATIC, the RSI has broken out of its trend line (green line) bearishly and dropped below 50.
Both signals are bearish and support further price declines. In the event of a bearish break out of the channel, the next immediate support will come into play at $0.43.
Meanwhile, a bounce off the channel’s support line could lead to a rise towards the $1.40 midline.
MATIC: Is a bearish breakout imminent
The results of the analysis of the daily chart support the picture on the weekly timeframe.
Here, MATIC made a bearish breakdown of the short-term upward support line, which has remained unbroken since the beginning of the year.
Such breakouts usually signify the end of the previous trend. In the case of MATIC, this trend was bullish.
In addition, the price dropped below the $1.04 horizontal support area, which also confirms a bearish breakout.
Previously, this area alternately acted as resistance and support. Accordingly, such a breakdown is a strong bearish signal.
And finally, the daily RSI is below the 50 mark (red icon) and is declining. Thus, both the weekly and daily charts support the downside scenario in the direction of $0.43.
Polygon (MATIC) Price Prediction
This bearish outlook will be canceled if the price recovers above the $1.04 area. In this case, a short-term strengthening of the price and its growth to $1.20 is likely.