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MATIC price set to slip lower as bearish environment dominates

  • MATIC price action refrains from making new lows as bulls keep believing in the potential uptrend.
  • Polygon trades in a global environment with two main bearish events setting the tone, adding pressure to the technical bearish outlook.
  • Expect to see a mild risk-on tone with MATIC booking some gains before going into the weekend.

Polygon (MATIC) price has investors licking their wounds after an eventful trading week with bulls jumping in the relief rally on Wednesday and getting squeezed out on Thursday, and yet again tilted to the upside today. Expect to see moderate bets from investors going long as more peace talks are scheduled and another eventful weekend is set to take place with cryptocurrencies the only tradable asset. Investors are trying to assess the longer-term situation with stagflation in Europe and peace still nowhere in sight for Ukraine. Expect to see downward pressure whilst at the same time leaving a small window of opportunity for MATIC to print some gains.

Polygon price offers bulls a small window of opportunity

MATIC price action was on the cusp of ticking $1.600 earlier this week, but bears quickly showed their force again as the European Central Bank came out with many ifs and buts on when the central bank will do its first rate hike. The message from Lagarde was clear that although inflation and stagflation are set to kick in, the ECB can not act at the moment as it needs to support the economy to deal with the refugee crisis and the energy price crunch that Europe is undergoing at the moment. With that, bears are still holding the upper hand as the two main bearish factors in markets have not been solved, and thus bulls will have to settle for small windows of opportunity and short-term trades.

MATIC price action is a perfect reflection of that this week, with bulls trying to buy the dips but needing to book profits quite quickly as a complete paring back can happen at any moment. Expect to see a similar pattern today with some upward potential towards $1.50, maybe even a brief test at $1.542, which is the high of this week. As the weekend is set to start with the same situation as last week, expect to see bears coming in near the end of the U.S. session and squeezing out bulls yet again before the weekend with a break below $10.400 and possible dip towards $1.302, printing new lows for the week.

MATIC/USD daily chart

MATIC/USD daily chart

Putting the risk of stagflation aside, the technical death cross is still in place as well, painting a grim prospect, although that could easily be untangled if a substantial risk on event were to run through global markets. That could come from bulls stepping in at lower levels and seeing these current discounts as a steal, together with the fact that they are starting to get accustomed to the current risk situation and pricing in Ukraine as a base case, and no longer as a tail risk. When that happens, expect to see more investors pouring into cryptocurrencies and seeing MATIC hit $1.75 to the upside, and with that move pulling the 55-day SMA back above the 200-day SMA.



 

Author

Filip Lagaart

Filip Lagaart is a former sales/trader with over 15 years of financial markets expertise under its belt.

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