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The current state of the MATIC and Polygon crypto ecosystem ranks among the worst. This has taken its toll following the demise of FTX, industry-wide contagion has impacted other projects, including Polygon.

Despite this, Polygon is among the top three DeFi companies by revenue. However, Polygon and its native coin should continue to bear the brunt of the pains of FTX’s collapse.

Box MATIC really rally now, as it falls to its support at $0.82 despite its social dominance?

For MATIC, it is a narrow market

At the moment, MATIC is trading at $0.861, with a fairly narrow green candle. The BB indicator shows a point of maximum pressure around the same price.

Coupled with the bearish formation of a descending triangle, this signifies the end of MATIC over the following days.

Past results show that the token has also struggled to gain traction. Data available on CoinGecko shows that MATIC is currently experiencing a losing streak across all timeframes, with the monthly timeframe being the only exception, posting a 2% gain.

Image: TradingView

According to CoinMarketCap in chain search engine, the majority of MATIC holders are now in the red, with over 66% of coins held there. These are all bearish indications that the situation could deteriorate.

Given that Polygon is an L2 for Ethereum, it’s no surprise that MATIC and ETH have close ties. Currently, the correlation coefficient between the two is 0.75. This indicates that the price movements of both are highly correlated with each other.

Investors and traders should watch this signal, as any significant price changes in ETH could help Polygon comeback. Overall, however, investors and traders should expect MATIC to break above $0.851

The bulls should look for support at $0.772.

An expected bearish breakout

Similar to what was previously stated, MATIC’s strong correlation with ETH can be a significant challenge for support, but a significant boost for an uptrend.

Despite Polygon’s social dominance, the loss of market confidence will surely drive MATIC’s price down.

A short position at or below the current market price will mitigate bearish market action. With the Bollinger Band indicating a significant drop in the MATIC price, we can anticipate a bearish breakout in the next few days.

As that day approaches, MATIC bulls can only pray for a miracle for a recovery to occur.

MATIC total market cap at $7.5 billion on the weekend chart | Featured image from Daily Hodl, Chart: TradingView.com



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