Polygon (MATIC) broke through the support line of the long-term structure. This could be a signal of the end of the long-term growth phase.
The daily timeframe also supports the continuation of the decrease in the rate of MATIC, because a bearish pattern has formed on the chart here.
Accordingly, the token can give up its position in both the short and long term.
Polygon: closing below bullish structure
MATIC is the native token of the Polygon network, a popular second-level scaling solution for the Ethereum blockchain.
It helps reduce cost and speed up transactions with sidechains. These are separate blockchains that operate independently of Ethereum, but are connected to the main network.
Polygon also helps port decentralized applications (dApps) to a connected blockchain system.
As the results of technical analysis of the weekly chart show, the forecast for the coin is bearish for a number of reasons.
First, MATIC made a bearish breakout from the rising parallel channel.
This pattern is considered a correctional pattern, so its northward direction suggests that the broader trend for the currency is bearish and eventually the price will make a breakout to the south from this channel.
The significance of this bearish breakout is reinforced by the fact that the pattern has been present on the chart since the beginning of the year.
Secondly, the Relative Strength Index (RSI) shows a bearish mood.
This index is a momentum indicator, indicating the overbought/oversold market, depending on whether it is above or below the 50 mark.
In the case of MATIC, the RSI fell below 50 (red icon), signaling a bearish trend and reinforcing the price signals.
The nearest support is located around $0.76 and the nearest resistance is represented by the channel midline at $1.40.
Whether to expect further falling of MATIC
Daily and weekly timeframes are giving similar signals. Although the price first rebounded from the $0.95 horizontal support area, it is now in the process of its bearish breakdown.
In addition, MATIC is moving along the short-term downtrend resistance line. Together, these two levels form a descending triangle on the chart, which is usually considered a bearish pattern.
So the most likely scenario is a bearish breakout of this pattern. This could take the market down to the next support at $0.76.
If price does not rebound today, its daily close will be its lowest since January 16 (red icon). Finally, the daily RSI also supports this bearish scenario. The index is below the 50 mark and declining.
Only the growth of MATIC above the resistance level and the recovery above the support line of the previous channel will indicate a bullish trend.
In this case, the growth to the midline of the channel at $1.40 is possible.
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