- MATIC price continues to test the rising wedge trendlines as primary support and resistance.
- EIP-1559 fee-burning mechanism could generate a reduction of MATIC’s supply by up to 0.27% for 2022.
- Downside risks are increasingly likely if bulls fail to keep pressure off MATIC.
MATIC price action has fallen below the rising wedge for the second time in January; the first occurrence was on January 8. The Kijun-Sen is the final support zone, and if it fails, MATIC could drop 20%.
MATIC price technical and fundamentals out of sync
MATIC price has some very imminent looking bearish price action ahead while the recent fundamentals are bullish. A recent upgrade on Ethereum (EIP-1559) introduces a deflationary behavior to MATIC, reducing the overall total supply over time. All things remaining the same, a reduction in supply means the underlying price/value increases.
However, despite the bullish fundamental news, the current technicals for MATIC price are definitely bearish. The bottom of the Ichimoku Cloud (Senkou Span B) at $2.08 is the final price support zone on the daily chart. If MATIC has a daily close below $2.08, an Ideal Bearish Ichimoku Breakout entry could be complete.
If MATIC does crack below the Ichimoku Cloud, then the neck-line of an unconfirmed head-and-shoulders pattern may act as support near the $2.00 mark. If not, MATIC has a clear path to test a support zone between the Volume Point Of Control at $1.50 and the 61.8% Fibonacci retracement at $1.69.
MATIC/USDT Daily Ichimoku Kinko Hyo Chart
The bearish scenario can be invalidated if bulls maintain a close above the bottom of the Cloud (Senkou Span B). Ideally, bulls can return MATIC price to a close above the Kijun-Sen at $2.42. That would likely provide enough breathing room for bulls on the sidelines to enter and begin the road to $3.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.