Polygon price breaks critical levels as MATIC looks to dive 18% underwater
- Polygon slices over 4% off its price tag as markets prepare for US inflation on Tuesday.
- MATIC sees bulls fleeing into US Dollar as bottom ascending trend line is broken.
- With the nosedive move in the RSI, there is still plenty of room for MATIC to tank around 18%.
Polygon (MATIC) price is continuing its sell-off on Monday that started on Sunday after bulls got rejected again from breaking above $1.312. Although bulls were eager to try and continue their mantra in February, which elevated the price action in January by 74%, it looks to be breaking down now. The sentiment changed two weeks ago on Friday, a very strong jobs report out of the US made traders realize that 2022 is simply continuing into 2023.
Polygon price could fall below $1 if the market gets caught off guard
Polygon price is being shot down with the same speed as the US is shooting down Chinese balloons out of the sky. As there is already elevated geopolitical tension with Russia starting its second offensive in Ukraine, the tensions between China and the US are also ramping up. This means that plenty of tail risk needs to be priced in. Of course, an escalation between the US and China would be an exponentially bigger issue for global markets than between Russia and Ukraine.
MATIC sees bulls shivering in their boots on the back of this after they enjoyed their easy ride higher in January when geopolitics were nowhere near the top of the agenda, and the situation in Ukraine seemed to be fading day by day. Should more headwinds be added, expect to see a drop lower as the break below the green ascending trend line could see a full 18% decline with price action saying goodbye to $1. By then, the Relative Strength Index (RSI) will have hit the oversold barrier, and the chances of more declines should be slim.
MATIC/USD daily chart
Should bulls be able to push price action back up above the green ascending trend line, some support and underpinning of the price action in Polygon could help to hold over the US inflation number on Tuesday. In case the inflation number declines further, expect to see a sharp jump higher above $1.312. That would mean bulls can stretch their legs and pump price action higher toward $1.50 near the monthly R2 resistance level for February.
Author
Filip Lagaart
FXStreet
Filip Lagaart is a former sales/trader with over 15 years of financial markets expertise under its belt.
