MATIC: This support zone could be the key to maintaining the bullish narrative
Disclaimer: The findings of the following analysis are the sole views of the author and should not be considered investment advice.
Over nearly two months, Polygon [MATIC] The bulls were on the front foot as they established the altcoin’s position beyond the 20/50 EMA. This rally initiated a critical bullish crossover at the 20 EMA (red) and 50 EMA (cyan).
A breach of the four-month trendline support (previous resistance) gave the bulls enough firepower to retest the $0.95 ceiling. A convincing close below the pattern could expose the crypto to a short-term decline in the coming sessions.
At press time, MATIC was trading at $0.908, down 2.34% in the last 24 hours.
MATIC daily chart
The continued uptrend of the channel (white) revealed the underlying uptrend in upside pressure. As a result, the broader outlook began to shift slightly in favor of the bulls.
Unfortunately, with the 200 EMA resistance coinciding with the $1.04-$0.95 range resistance, MATIC could see a tough hurdle in the coming sessions.
On the other hand, empirical bullish crossovers at the 20/50 EMA have provided short-term support at the 20 EMA zone. So the alt could continue its compression in the $0.74-$1 range before committing to a trend.
A break below the up-channel could trigger a short-term drop towards the $0.74 level before a possible reversal. A possible close above the $1.04 level may trigger a test of the upper trend line of the up-channel before a pullback.
The Relative Strength Index (RSI) secured its position above the midline to depict a slight buying edge. A sustained position above the 58-mark support could continue to support near-term buying trends.
In addition, the drop of Chaikin Money Flow (CMF) below zero highlighted a selling advantage. Even so, it made lower lows over the past two weeks and deviated higher with the price action.
The Volume Oscillator (VO) has been in a sharp downtrend as trading volumes have taken a sharp dive in recent days. A possible increase in volumes could help the alt move out of its low volatility phase.
MATIC’s swing above the 20/50 EMA bands reflected a short-term upside advantage. A rebound from the lower trend line of the up-channel could encourage a bull run before a pullback.
However, a break below this reversal pattern could lead to a short-term bearishness. The objectives will remain the same as mentioned above.
Finally, investors/traders should keep a close eye on Bitcoin’s movement as MATIC shares an amazing 86% 30-day correlation with the king coin.