Polygon (MATIC) has bounced at a crucial horizontal support level at $0.74. Afterward, it broke out from a short-term descending resistance line.
MATIC had been falling underneath a descending resistance line since reaching an all-time high price of $2.72 in Dec. The downward movement led to a low of $0.316 on June 18.
The price has been increasing since, in an upward movement that was preceded by bullish divergence in the daily RSI (green line). On July 7, it managed to break out from the descending resistance line.
Afterward, it proceeded to reach a high of $0.79. This movement also caused the daily RSI to move above 50. This is considered a sign of a bullish trend.
If the upward movement continues, the next closest resistance would be at $1.32.
The six-hour chart also provides a bullish outlook. It shows that MATIC has bounced at the $0.74 horizontal support area (green icon). Subsequently, it broke out from a short-term descending resistance. It is currently attempting to validate it as support.
Moreover, the six-hour RSI has also broken out from a descending resistance line and moved above 50, thus supporting the continuation of the upward movement.
MATIC wave count analysis
Cryptocurrency trader @CryptoCapo_ tweeted a chart of MATIC, stating that the price is completing wave four of a five-wave downward movement.
While it is possible that the price is still in wave four of a five-wave downward movement, the breakout from the descending resistance line makes this unlikely. So, it would make more sense for the decrease to be an A-B-C corrective structure (black), in which waves A:C have had a 1:1 ratio.
In the short-term, it seems that MATIC began a five-wave upward movement on June 18 and has just completed a fourth wave pullback. The most likely target for the top of the fifth wave is between $1.13-$1.14. The target is found using an 1.61 external retracement on wave four and the 0.618 length of waves one and three (white).
After the target is reached, a retracement would be expected.
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