MATIC Price Prediction: Polygon suffers setback but bulls hint at potential reversal

MATIC price suffered a setback as it sliced through the equilibrium point and continued its descent. A bounce from the immediate support seems to have originated, but the chances of a down move are still present.

MATIC price drops below key level, bulls try to reverse action

MATIC price dropped below the 50% Fibonacci retracement level at $1.588 on Monday after teetering above it for a long time. This sell-off was part of a larger move that pushed the entire market lower.

As Bitcoin and other altcoins recover, Polygon price also shows signs of an uptrend. So far, MATIC has rallied 8% and hints at a continuation of the upswing. A decisive 4-hour candlestick close above the 50% Fibonacci retracement level at $1.588 will confirm the start of recovery.

However, a rejection at these levels could reignite the sell-off, sending Polygon spiraling.

If this were to happen, MATIC price would slice through the immediate support barrier at $1.352, followed by $1.229 and $1.

In extremely bearish conditions, Polygon could retest the range low at $0.745.

MATIC/USDT 4-hour chart

While the upswing might pose as a reversal sign, rejection at $1.588 or a fakeout above it could  trap unbeknownst investors. Therefore, market participants need to exercise caution.

Polygon on-chain metrics show difficult path for bulls

Adding credence to the risky upswing narrative is IntoTheBlock’s In/Out of the Money Around Price (IOMAP) model, which shows large clusters of underwater investors present above the current position, $1.469.

Roughly 3,450 addresses that purchased nearly 109 million MATIC at an average price of $1.59 are “Out of the Money.” Hence, any short-term spike in buying pressure will most likely face selling pressure from investors who might want to break even.

Only 204 addresses that purchased 64 million MATIC at $1.46 are present as support levels. Therefore, it is likely that a momentary spike in selling pressure will easily topple the demand barriers.

MATIC IOMAP chart

On the other hand, if MATIC price produces a decisive 4-hour candlestick close above $1.728, it will invalidate the bearish thesis and invoke a 13% rally to $1.944.

Breaching this level could push Polygon to $2.26.