MATIC has had a wild ride these past couple of weeks, rallying first at the beginning of May, then dropping like a rock all last week.
After dropping more than 70%, it gained it all back in the the last few days….what is this market! What’s Polygon doing now and where could it go to next?
Short-term Top in MATIC?
I covered MATIC/USD on Monday, pointing out the rising ‘lows’ pattern forming on the four hour chart that should be watched for a bounce or a potential break. I said “it wouldn’t be a surprise if MATIC/USD dipped again in the near future” and if there is a sustained break below the rising ‘lows’ pattern, “look for a retest of the early May consolidation area around $0.77 before the market stabilizes.”
That’s pretty much what we got as MATIC/USD dropped all the way down to $0.75 as the crypto markets continued to melt last Sunday, before traders bought the dip and amazingly took the market all the way back up to near all-time highs above $2.00 in just a few days!
On can argue that a 200% recovery in just a few days is a likely overdone move, and right now the market is agreeing as MATIC is having trouble staying above the $2.30 handle.
Considering that even projects with strong fundamentals and bullish headlines (Polygon price surges following investment from Mark Cuban) can be overbought at times, this may be a short-term opportunity that traders may use to possibly trim positions to lock in profits, or at the very least, avoid starting fresh long positions.
Holding off new buys is a move some traders may consider as competitors to Polygon’s layer-two scaling solution dominance are coming soon (Uniswap v3 looks set for layer-two scaling on both Arbitrum and Optimism), potentially keeping new investor/trader buy orders away until they see how that battle plays out.
If MATIC does dip once again, it’s not likely to get back to the $0.75 as the deleveraging factor that drove the mass sell-off is not likely in play, but a move to the $1.50 -$1.60 area may be enough to potentially draw in buying support from fundie traders for this top tier crypto project.
Of course, if MATIC/USD is able to break and sustain above the $2.30 handle, then we could see another run higher and potential to out perform the rest of the crypto markets once again.
What do you all think? Is the bull run now over or is a dip in the cards for this highly volatile market? Let me know in the comments section below!