• MATIC price has slumped below the lower trend line of a rising wedge.
  • A 220% gain over eight days warrants a mild correction.
  • Demand for layer 2 scaling solutions puts Polygon in the driver’s seat. 

MATIC price decline below the lower trend line cues market operators for a much-needed consolidation in the hurried race for new highs. The downside should be limited as late arrivals search for a cheaper entry.

MATIC price solidification of early 2021 gains lays the groundwork for explosive rally

Polygon is a layer 2 scaling solution for Ethereum by creating side chains that run along the main Ethereum blockchain and aggregate transactions to bypass ETH’s steep transaction fees and slow speed. Essentially, the side chains increase the throughput of the system, as measured by transactions per second, enabling decentralized finance to attract more users.

From March 14 to April 25, Polygon traveled in a sideways range of approximately 60%, with the weekly closes occurring between $0.360 and $0.385 for seven of the eight weeks. It was a rare formation, but the price contraction motivated by indecision on both sides of the trade generated the energy to carry the altcoin over 200% higher.

Today’s bearish reversal above the rising wedge’s upper trend line has carried through with a break of the lower trend line and a loss of 7.50%. The Polygon reversal was foreshadowed by a bearish momentum divergence on the 4-hour chart, as the Relative Strength Index (RSI) failed to confirm the price highs of yesterday or today.

MATIC price will encounter support at the 161.8% Fibonacci extension of the March-April decline at $0.809, but a more legitimate level of support is $0.675. A collapse below $0.675 alters the Polygon outlook and broadcasts an acceleration of the correction to the 38.2% retracement of the recent rally at $0.605.

MATIC/USD 4-hour chart

MATIC/USD 4-hour chart

In light of the superior momentum of the rally, it is conceivable that MATIC undergoes a correction in time versus price, forcing the patience of speculators waiting for a deeper correction to engage the cryptocurrency, leading to a new thrust higher for Polygon.


Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Join Telegram

Recommended content


Recommended Content

Editors’ Picks

MANTA suffers 4% pullback after unlocking tokens worth $40 million

MANTA suffers 4% pullback after unlocking tokens worth $40 million

Manta Network (MANTA) unlocked over 8% of its circulating supply on Thursday. The unlocked tokens were airdropped and distributed in public sale, according to data from Tokenunlocks. 

More Cryptocurrencies News

XRP struggles to recover as lingering Ripple lawsuit could reach Supreme Court, former SEC litigator says

XRP struggles to recover as lingering Ripple lawsuit could reach Supreme Court, former SEC litigator says

The SEC vs. Ripple potential showdown at the Supreme Court is likely, says former SEC litigator Ladan Stewart. XRP Ledger calls developers, businesses and investors to build on the blockchain, extending Apex 2024 registration until April 30. 

More Ripple News

Bitcoin Layer 2 Merlin chain TVL climbs 20%, defying broad market correction

Bitcoin Layer 2 Merlin chain TVL climbs 20%, defying broad market correction

Merlin chain’s TVL added 20% this week, and crossed $800 million on Thursday. Bitcoin Layer 2 assets noted double-digit losses in the past week. Stacks, Elastos, SatoshiVM, BVM are hit by a correction as Bitcoin hovers around $61,000. 

More Bitcoin News

If Bitcoin restarts bull run, these altcoins are likely to explode Premium

If Bitcoin restarts bull run, these altcoins are likely to explode

If Bitcoin’s consolidation ends and the bull run resumes, altcoins are likely going to trigger a massive rally. Last cycle’s hot tokens like SOL, AVAX, WIF, ONDO, etc., could see renewed enthusiasm. 

More Cryptocurrencies News

Bitcoin: BTC’s rangebound movement leaves traders confused

Bitcoin: BTC’s rangebound movement leaves traders confused

Bitcoin (BTC) price has been hovering around the $70,000 psychological level for a few weeks, resulting in a rangebound movement. This development could lead to a massive liquidation on either side before a directional move is established. 

Read full analysis

BTC

ETH

XRP