The Polygon (MATIC) price is rapidly approaching its yearly lows, having broken down from a critical horizontal support area.
Even though the price action is still bearish, the wave count and RSI readings suggest that the price could reach a bottom soon.
Polygon Price Descent Continues After Rejection
The weekly timeframe technical analysis for MATIC provides a bearish outlook. There are two main reasons for this, both relating to the price action.
Firstly, the MATIC price broke down from the support line of an ascending parallel channel in April. This was an important bearish development since the channel had previously been in place since June 2022. Therefore, the breakdown from it is a sign that the trend is now bearish.
This was confirmed when the price fell below the $0.80 horizontal area and validated it as resistance in July (red icon). The ensuing rejection created a very long upper wick, considered a sign of selling pressure.
The MATIC price has fallen since the breakdown and is currently trading at $0.55. If the downward movement continues, the next closest support will be at $0.40, a drop of 26% measuring from the current price.
The weekly Relative Strength Index (RSI) gives mixed signs. By using the RSI as a momentum indicator, traders can determine whether a market is overbought or oversold and decide whether to accumulate or sell an asset.
If the RSI reading is above 50 and the trend is upward, bulls have an advantage, but if the reading is below 50, the opposite is true. On one hand, the indicator is below 50, a sign of a bearish trend. On the other, it has generated bullish divergence, an occurrence which often precedes bullish trend reversals.
Therefore, the weekly RSI gives undetermined readings for the future trend’s direction.
However, there are some positive news regarding the Polygon (MATIC) price. LimeWire is building a new platform on Polygon, which will utilize AI that generate NFTs for sale, in turn paying original content developers. Also, Wirex and Veloce are both deploying on Polygon.
Read More: Best Crypto Sign-Up Bonuses in 2023
MATIC Price Prediction: Elliott Wave Count Predicts Bottom
The daily timeframe provides a bearish outlook for MATIC, but also suggests that a bottom will be reached soon. The main reason for this comes from the wave count, but the RSI also suggests that the price is nearing a bottom.
By studying recurring long-term price patterns and investor psychology, technical analysts utilize the Elliott Elliott Wave theory to ascertain the trend’s direction.
The most likely count suggests that MATIC is in the fifth and final wave of its decrease which began in February. The shape of the fourth wave goes a long way in suggesting that this is the correct count.
Wave four was contained inside an ascending parallel channel, which is common in such corrective movements. Additionally, the top of wave four caused a deviation above the $0.80 horizontal area, which was then turned to resistance.
If the decrease continues, the MATIC price will complete its fifth and final wave at $0.41, at the 1.27 external Fib retracement of wave four. This target coincide with the long-term $0.40 horizontal support area.
Moreover, the daily RSI has begun to generate bullish divergence, a sign associated with bottoms.
Therefore, the most likely MATIC price prediction is a decrease to $0.40 followed by a significant bounce. However, reclaiming the $0.60 area will mean that the bottom is in and that the price could increase by 40% to the next resistance at $0.80.
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