Polygon formed a bearish candle
In December 2021, MATIC reached an all-time high of $2.90 and has since been declining along a descending resistance line. In June 2022, the price found its bottom at $0.32 and then began to rise.
Despite the upward movement, the token was unable to break through the descending resistance line. Instead, Polygon made several bounces from it. The last such episodes were observed in November and December 2023 (red icons).
They include a failed breakout attempt that resulted in a bearish engulfing candlestick two weeks ago.. MATIC is currently trading below the descending resistance line, which is 750 days old.
Source: TradingView
However, the relative strength index (RSI) is showing bullish signs. It is above the neutral level of 50 and has formed a hidden bullish divergence (green), which is a sign of trend continuation.
MATIC forecast: can the price develop a rebound
The daily timeframe gives conflicting signals and does not confirm whether the trend is bullish or bearish. Instead, it proposes two possible scenarios for the movement of MATIC based on the results of Elliott wave analysis.
The bullish calculation suggests that Polygon has completed an ABC correction structure (white) that has been contained within an ascending parallel channel.
If this option is correct, then the rebound on January 8 (green icon) marked the end of the decline, causing the beginning of the fifth wave (black color). In this case, MATIC will rise by almost 40% to the channel resistance trend line at $1.18.
Source: TradingView
The bearish scenario suggests that the five-wave upward movement is complete, and the fourth wave was a symmetrical triangle.
Thus, the price is currently in wave C of its correction, which will lead to a 22% regression to the nearest support level of $0.65.
Source: TradingView
As a consequence, the forecast will be determined by whether the price makes a bullish or bearish breakout from the channel. Depending on this, we could see an increase of 40% or a decrease of 22%.
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