Why Polygon's MATIC price fade could be a sign for more downside to come

Polygon (MATIC) is – no different from other cryptocurrencies – on the back foot on Monday as bears are pressing their mark on this first day of the new trading week. Not only are the current macroeconomic and geopolitical uncertainties a significant factor that weighs on investors' sentiment, but also crypto’s own grim outlook, as Bloomberg reported a broad survey revealing that 90% of top traders saw Bitcoin heading to 10K. This has dragged the whole crypto ecosystem down. This news hit the brand and credibility of Polygon and could see price action fall back to $0.300, losing over 40% of value.

MATIC price sees image dented

Polygon price is facing reality after traders started to think that MATIC price action could be unleashed from the global financial woes and backdrop that has been depressing investors' sentiment. Unfortunately, that idea did not hold for long. Over the weekend, some massive profit-taking happened after Polygon's price hit $0.620 and received a firm rejection on that move. Even on Sunday, the 55-day Simple Moving Average came in for support and seemed to be holding but the bearish pressure is increasing on Monday.

MATIC price, for now, counts on $0.545 for support together with the 55-day SMA where some buying will happen. The question is if that is enough as a sell-off is rolling through global markets this morning and could easily match and overturn the support for a break lower towards $0.500. Here, the supportive trend line will be critical going forward looking for support, and when that breaks, a full collapse back to $0.300 is inevitable, with a whopping 43% devaluation at hand.

MATIC/USD Daily chart

Polygon price recovery could be helped if bulls can refrain from having a daily close this evening below $0.545. This way, bulls could hold the area between $0.620 and $0.545 to trigger a bounce and break above $0.620 towards $0.663. This way, a bullish signal would be delivered to the markets, and more investors would jump on the breakout to be part of the rally, pumping up the price action, possibly even towards $0.850 in the short-term.