- MATIC price hints at a 15% downswing as the $1.51 swing low breaks down.
- This move could push the Layer 2 token to $1.41 and, in dire cases, $1.30.
- Uniswap governance forum saw a proposal that discusses deploying the AMM to Polygon.
MATIC price has been consolidating for the past ten days and hints at a further descent to support levels. This downswing is a result of the violation of a recent swing low and the bearish outlook of the big crypto from a short-term perspective.
Proposal to launch Uniswap on Polygon
Uniswap governance forum saw a proposal to deploy the Automated Market Maker (AMM) on Polygon to reduce the gas fees considerably. With the popularity of Ethereum in the 2021 bull rally and the entry of new investors, the gas fees have skyrocketed. These ‘push and pull’ mechanics have been around for as long as one can remember.
Despite the implementation of the London hard fork and the introduction of Proof-of-Stake mechanics, the cost has not seen a staggering reduction that will allow retail investors to transact on the ETH blockchain without having to pay massive gas fees.
Polygon has become the go-to scaling solution for Ethereum, and other platforms like SushiSwap, Matcha, Aave, Curve, Balancer, etc., have all launched their respective platforms on the Polygon PoS. Since Uniswap has not done the same, this proposal aims to do that.
If successful, this will further add a tailwind to the already bullish fundamentals of the MATIC token. While the adoption of Polygon is bullish from a long-term perspective, the short-term technical outlook for MATIC price shows bearish signs.
MATIC price to return to mean
MATIC price breached through the November 10 swing low at $1.51 on November 16. This downswing indicates that the market makers are anticipating the token to head lower. So far, Polygon reacted below the $1.67 resistance barrier and dropped 6.4% to where it currently trades - $1.57.
Going forward, investors can expect MATIC price to continue its descent to retest the $1.45 and $1.41 support levels. While the Layer 2 token will likely consolidate around $1.41, market participants should expect the market makers to drag the token down to fill the Fair Value Gap (FVG).
Therefore, a breakdown of these two barriers should knock the MATIC price to $1.30, constituting a 22% drop from $1.67.
MATIC/USDT 4-hour chart
While the downswing is likely, MATIC price could head higher and sweep the $1.67 resistance barrier for ‘buy stop’ liquidity. If this uptick in buying pressure pushes Polygon to produce a higher high above $1.77, it will invalidate the bearish thesis.
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.
Follow us on Telegram
Stay updated of all the news
Will Dogecoin (DOGE) price pull an XRP and rally 60% next week?
Dogecoin price has been in a tight range bound movement since November 22. However, the recent recovery above the range low looks promising and hints at an explosive move for next week.
SEC Chair Gary Gensler’s latest call signals tough times ahead for crypto players
US Securities and Exchange Commission (SEC) chair, Gary Gensler, has hinted at tough times ahead for crypto players. In his testimony before the House Appropriations Subcommittee on Financial Service and General Government, Gensler advocated for additional infrastructure.
Crypto firms' de-banking escalates as banks reject applications due to liquidity and regulatory concerns
The crypto market has been facing hurdle after hurdle since Q2 2022 when Three Arrows Capital collapsed, which worsened in November 2022 following the bankruptcy of FTX. This led to a number of crypto companies falling.
Making a case for Binance Bicasso NFTs playing catalyst to BNB price recovery, $357 incoming?
BNB price is up three days in a row despite the legal tussle between the largest exchange by trading volume, its CEO Changpeng Zhao (CZ), and the Commodity Futures Trading Commission (CFTC).
Bitcoin: Breaking down key BTC levels to accumulate for Q2, 2023
Bitcoin price shows an interesting outlook as the first quarter of 2023 comes to an end. BTC has shown strength since day one of 2023 and has netted investors approximately 70% in returns.