MATIC price tests critical support after a 10% drop as the crypto market loses $40 billion

MATIC price, following most cryptocurrencies, is declining considerably on Tuesday due to the impact of FTT-induced market volatility. The altcoin, however, has been shielded from excessive drawdown thanks to its recent developments. If a similar momentum is maintained going forward, MATIC might even resume its uptrend.

MATIC price takes a dive

MATIC price can be seen fluctuating around $1.13 on Tuesday after declining by almost 10%. During the intra-day trading hours, MATIC declined from $1.25 to $1.10 before rising back up a touch to its current market value. 

The broader market collapse can be attributed to the ongoing FTX-Alameda controversy, which has resulted in FTT crashing by 30%. This has triggered a drawdown for many other cryptocurrencies, potentially even MATIC.

After last week’s rally, MATIC became a portfolio favorite of crypto investors, which resulted in a buying spree for the cryptocurrency. As visible on the RSI, this buying pressure overheated the market, which could only be followed by consolidation or correction. 

A test of the 61.8% Fibonacci Retracement of the April to June decline, from $1.69 to $0.34, at $1.18, had been expected, however, bears tore down that level, and MATIC has now tested $1.13 as support. Nevertheless, this is also a key support level that will help MATIC sustain its recent rise.

MATICUSD 1-day chart

From here on, the next critical resistance for the altcoin is at $1.32. Flipping this into support would bring MATIC closer to the uptrend line 1 (UL1), where it is likely to face resistance initially. If it can also turn this into support, however, it will be an indication of recovery. 

If MATIC price was to decline further, it could still find its feet at the 50% Fib level at $1.02 and the higher lows’ uptrend line (UL2), which is also offering support.

Expansion into Europe

Regardless of the crypt market’s movement, Polygon is continuing its pursuit of reaching a wider audience, most recently by entering into a partnership with deltaDAO. 

deltaDAO needs a customizable blockchain that can comply with European crypto and privacy regulations for its Gaia-X ecosystem. This comes in the form of Polygon Supernets, joining hands with which has created a global trustless data economy.

Through Gaia-X Supernets, deltaDAO aims to establish a federated system linking service providers and users transparently. In the long run, this would also make Polygon, a front-runner as a Web3 ecosystem foundation builder.