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Brace for Another 22% Drop in the Polygon (MATIC) Price

2 mins
Updated by Artyom Gladkov
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In Brief

  • MATIC broke down from an ascending support line.
  • There is horizontal support at $0.78 and $0.60.
  • MATIC broke out from a short-term descending resistance line.
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The Polygon (MATIC) price is at risk of breaking down from the $0.78 horizontal support area, which could lead to a downward movement toward $0.60.

Polygon is a layer-2 scaling solution for the Ethereum blockchain. It effectively transforms the Ethereum network into an internet of blockchains and improves its capabilities relating to smart contracts and decentralized applications. 

The MATIC price broke down from an ascending support line and now risks breaking down from a horizontal support area. If this occurs, it could catalyze a decrease of 22%.

MATIC Breaks Down From Key Support

The MATIC price has decreased since reaching a high of $1.30 on Nov. 5. Initially, the price bounced at an ascending support line (green icon), leading to a short-term rally. However, it broke down from the line on Dec. 16 and validated it as resistance the next day. 

Currently, the Polygon price is trading just above the $0.78 horizontal support area. This is a crucial area since it has previously acted as support since the end of July. As a result, a potential breakdown below it could accelerate the rate of decrease. 

The daily RSI is bearish, supporting the possibility of a breakdown. This is because it is decreasing and has moved below the 50 line. Therefore, the most likely MATIC token price move is a breakdown toward the $0.60 area. From the current price, this amounts to a 22% drop.

Conversely, reclaiming the ascending support line would indicate that the trend is bullish instead.

Poolygon (MATIC) Price Support
MATIC/USDT Daily Chart. Source: TradingView

Short-Term Rally on the Horizon?

Despite the bearish readings from the daily time frame, the short-term six-hour chart indicates that an initial MATIC price rally is expected before the drop. The MATIC network price broke out from a descending resistance line after the RSI generated bullish divergence (green line). While it has not yet initiated a rally, it has validated the resistance line as support 24 hours after the breakout.

If the upward movement continues, there would likely be resistance at $0.82-$0.85, created by the 0.382-0.5 Fib retracement resistance area. This would also coincide with the long-term resistance from the daily time frame. Afterward, a drop would be expected. However, reclaiming the area could mean that the trend is bullish.

Short-term Polygon (MATIC) price
MATIC/USDT Six-Hour Chart. Source: TradingView

To conclude, the readings for MATIC in the daily time frame are bearish, supporting a drop toward $0.60. However, an initial short-term really toward $0.82-$0.85 is likely before the fall. Reclaiming this area would suggest that the trend is bullish instead.

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Disclaimer

In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and ConditionsPrivacy Policy, and Disclaimers have been updated.

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Valdrin Tahiri
Valdrin discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona School of Economics. Shortly after graduating, he began writing for several different cryptocurrency related websites as a freelancer before eventually taking on the role of BeInCrypto's Senior Analyst. (I do not have a discord and will not contact you first there. Beware of scammers)
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