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Polygon Falls Under $1, Returns to 170-Day Support – Will MATIC Bounce or Break Down?

Last Updated April 3, 2024 1:22 PM
Valdrin Tahiri
Last Updated April 3, 2024 1:22 PM
By Valdrin Tahiri
Verified by Peter Henn

Key Takeaways

  • The MATIC price has decreased by 10% since the start of the year.
  • It fell below $1 in April, returning to a long-term support trend line.
  • Will the MATIC price bounce, or will it break down below support instead?

The MATIC price has decreased by nearly 30% since March 13, falling below $1 and reaching a long-term ascending support trend line. This is the third time Polygon has reached this level.

The crypto has underperformed in 2024, and investors are bracing for the possibility of a breakdown, which could lead to a further decline. Will MATIC bounce and stave off this plunge?

MATIC Returns to Long-Term Support

The technical analysis of the daily time frame shows the MATIC  price has traded inside a long-term ascending parallel channel since October 2023. Both the resistance and support trend lines have been validated three times.

More recently, MATIC was rejected by the channel’s resistance trend line on March 13 and has fallen nearly 30% since. Today (April 3), MATIC reached the channel’s support trend line (green), which has stood for nearly 170 days. Whether the MATIC price bounces or breaks down can be critical in determining the future trend’s direction.

MATIC Price Falls to Long-Term Support
MATIC/USDT Daily Chart | Credit: TradingView

The daily RSI and MACD both give bearish readings. The indicators are trending downward, the RSI is below 50 and the MACD is in negative territory. While there is a potential bullish divergence generating in the latter (green), it is not sufficient to negate all the other bearish signs.

So, a look at a shorter time frame is needed to determine the direction of the next movement.

MATIC Price Prediction: Bounce or Breakdown?

The short-term six-hour chart suggests the MATIC price will bounce. This is because both the RSI & MACD have generated bullish divergences. The divergences important is increased since they occur right at the channel’s long-term support trend line.

If a bounce follows, the MATIC price will be likely to break out from its descending resistance trend line (white) and increase to the channel’s midline at $1.13. This is an increase of 23% and coincides with the 0.618 Fibonacci retracement resistance level.

MATIC Price Potential Short-Term Bounce
MATIC/USDT Six-Hour Chart | Credit: TradingView

This bullish prediction will be rendered invalid if MATIC breaks down from the long-term channel. Then, a 20% drop to the $0.70 support area will be the most likely future price scenario.

Short-Term Bounce Likely, Long-Term Trend Uncertain

To conclude, the MATIC price likely to bounce in the short-term due to multiple bullish divergences at long-term support. However, the long-term trend remains undetermined due to the mixed price action and indicator readings. Whether the MATIC price breaks out or down from its long-term channel will be key in determining the next movement’s direction.

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