MATIC Price Forecast: Polygon primed for a quick 20% gain
- MATIC price struggling with resistance at the 21-day simple moving average (SMA).
- Volume contraction indicates price decline is corrective, not impulsive.
- Weekly Relative Strength Index (RSI) is still overbought.
MATIC price increase of 3000% from the beginning of 2021 reflects how Polygon brings tremendous scale to Ethereum using an adapted version of Plasma and PosS-based side chains. However, it was natural that the cryptocurrency corrected to the 0.50 retracement level of the 2021 mega-advance at $0.281. The total correction was on volume significantly less than the 50-day SMA.
MATIC price needs to reclaim critical moving average on a daily close
If Polygon can close above the 21-day SMA at $0.363, it would be the first step in confirming a correction low. The first notable resistance for a renewed rally is the 0.618 Fibonacci retracement level of the correction at $0.454, a gain of 18%, followed by the 0.786 Fibonacci retracement level at $0.498 and then the all-time high at $0.545.
It is important not to let a rise to $0.454 overshadow that Polygon is still very overbought on the weekly chart and needs more time to release the condition before confidently attacking new highs.
MATIC/USD daily chart
On the downside, MATIC price needs to hold the 0.50 retracement level at $0.281, or it will quickly test the 50-day SMA at $0.246 and then the 0.618 Fibonacci retracement level at $0.219.
Author
Sheldon McIntyre, CMT
Independent Analyst
Sheldon has 24 years of investment experience holding various positions in companies based in the United States and Chile. His core competencies include BRIC and G-10 equity markets, swing and position trading and technical analysis.
