Analysis

Polygon: Bulls have the upper hand, but for how long?

Polygon [MATIC] has trended higher in the past two weeks, but both momentum and demand have slowed down in the past 36 hours.

Published

1 year ago

on

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

  • MATIC’s market structure on the daily and 4-hour was bullish.
  • The beginning of an uptrend was established in mid-June.

Polygon [MATIC] revealed some information about Polygon 2.0 a few days ago. The new update is designed to provide “unlimited scalability and unified liquidity,” according to a tweet from 30 June.

How much are 1,10,100 MATICs worth today?

This did not see an immediate positive reaction from the prices. Instead, on 30 June, MATIC retraced its recent gains and fell from $0.669 to $0.61.

Moreover, bulls have driven a bullish structure break in the past three weeks. Will this result in an uptrend, or will the prices fall toward $0.61 again?

The indicators showed a lack of demand behind MATIC recently

Source: MATIC/USDT on TradingView

MATIC climbed past the $0.678 level on 22 June. This level had been the lower high from 13 June on both the H4 and daily charts. This signified a break in structure and was a sign of bullish intent. Fibonacci retracement levels were plotted for this move.

They showed that the 50% and 61.8% retracement levels were tested on 28 June as support before MATIC prices rebounded higher. Therefore, the price action showed that further gains toward the 23.6% extension level at $0.747 were possible.

Yet, the OBV has not breached the high it formed on 22 June, even though the price was back near the local highs. This indicated a lack of strong demand that could drive a breakout.

Hence, this finding opened the possibility that MATIC could face rejection near the $0.715 mark and fall toward the $0.616 low again.

The Open Interest trended higher in July; sentiment remains bullish

Source: Coinalyze

The past few days saw MATIC prices climb slowly from $0.62 to $0.715. During this time, Open Interest was also steadily climbing. It fell alongside prices in the past 24 hours when the bulls faced a rejection at $0.715, but ascended once again.

Realistic or not, here’s MATIC’s market cap in BTC’s terms

This hinted at bullish sentiment in the market. Speculators were also willing to bid.

In contrast to this finding, the spot CVD has sloped firmly negatively over the past 24 hours. This showed strong selling in the market. Alongside the OBV, it suggested that MATIC could face rejection near the $0.7 region.

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