Polygon investors weigh the risk of U.S. regulations on MATIC price
- With risk-off across the board, both the U.S. central bank and Congress are looking into regulations for cryptocurrencies.
- The positive side-effect from sanctions against Russia is declining against regulation uncertainty.
- Expect MATIC price action to slip below $1.57, looking for lower-level support.
Polygon (MATIC) price action is under scrutiny by the US Federal Reserve and the White House after comments that the US is looking into greater regulation for cryptocurrencies. After several major cryptocurrency exchanges ignored demands from Biden to ban operations by Russian participants, the US is now looking into seizing control of cryptocurrencies. The comments sparked a drop in MATIC price, set to fall below the critical support at $1.57 with more losses to come.
MATIC looks heavy as regulations outweigh side-effects
Polygon price was on the cusp of breaking above $1.75 after a three-day winning streak as investors enjoyed favourable tailwinds coming from buying by people in both Ukraine and Russia using cryptocurrencies as an alternative method of payment. With the improvement of sanctions, Biden was quick to ask several crypto exchanges to exclude Russian clients, but all exchanges came out with a joint statement that cryptocurrencies are not bound by the law of any country and are there to provide free movement. In a countermove, Biden drilled down on cryptocurrencies in his State of the Union speech, and Powell asked for regulations to be imposed in his seasonal Senate hearing on monetary policy.
MATIC price is shedding near 3% intraday with bulls jumping in to support the $1.57 pivotal level. Although it looks to hold – for now – the Relative Strength Index (RSI) is taking a nudge lower and dipping back below 50, revealing that bears are again taking over control of the price action. A break below $1.57 later in the session or tomorrow could see a sharp drop lower towards either $1.40 or $1.30.
MATIC/USD daily chart
Should investors withstand current selling pressure, more upside is to be had as regulations will take months to be passed by both the House and the Senate and would still be limited to only the US borders. Investors would quickly shake off any downturn, and MATIC would see more buying towards $1.75. With that, the 200-day Simple Moving Average (SMA) will be broken to the upside, and a return to $2.00 in the near term would be feasible.
Author
Filip Lagaart
FXStreet
Filip Lagaart is a former sales/trader with over 15 years of financial markets expertise under its belt.
