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What a week for crypto assets, am I right? After a violent downdraft in Wednesday’s trade, most crypto’s have recovered nicely from intraweek bottoms, including MATIC–one of the hottest crypto assets as of late.

Is this a buying opportunity for medium to longer-term traders, or just a bounce before another more lower?

MATIC Uptrend Still in the Works?

MATIC/USD 4-Hour Crytpo Chart
MATIC/USD 4-Hour Crytpo Chart

For those who are unfamiliar with MATIC, it is the token and ticker for Polygon, a “protocol for and framework building and connecting Ethereum-compatible blockchain networks.” And its demand has increased significantly in May as it has been viewed as a potential solution for the recent challenges and limitations that have risen for Ethereum based projects, including high gas fees and scalability limitations of the Ethereum network. To learn more about the project visit: https://polygon.technology/about/

So, this project has the promise to become a big player in the crypto space, and likely why we’ve seen the value of MATIC rise dramatically in 2021, opening the year at just under $0.02 and hitting all time high’s this week at $2.82. Whoa!

Unfortunately for the bulls, Polygon wasn’t able to escape the broad sell-off and liquidation that hit the crypto space this week, dropping as low as $1.05 before recovering and stabilizing around current levels just under the $2.00 handle. What a rollercoaster ride to say the least!

So looking forward, the fundamentals haven’t changed for Polygon, or the rest of the crypto space for that matter in the span of a few days.  And being an asset on the rise in terms of adoption and innovation, the odds lean in favor of the idea that this project will continue to gain in value for now.

With that said, volatility will likely remain high for the crypto markets, so it wouldn’t be a surprise if MATIC/USD dipped again in the near future given its current daily ATR of roughly $0.40 (around 21% of current price per day).  And if looking to start a position on this crypto asset, watch out for bullish candlestick patterns around the rising ‘lows’ pattern / support area between $1.00 – $1.50 before building a long idea.

And if you’re in the bear camp, likely thinking there is more deleveraging ahead for crypto assets, look out for a sustained break below the rising ‘lows’ patterns before considering a short position. If the market does break lower, we could see a retest of the early May consolidation area around $0.77 before the market stabilizes.

And please remember, NEVER trade cryptos with leverage! Crytpo assets is a relatively new asset class, and until it matures (likely over the next 5 – 10 years), it will be a highly volatile market, especially with traders unfortunately being given the ability to trade with leverage. And as we saw this week, when the markets move against leveraged traders, their accounts get taken out pretty quickly!

Don’t get blown out. Learn everything you can about what you’re trading to understand and manage the risks, to build a strong conviction to weather the volatility, and to know when it makes sense to exit a trade. Don’t let price alone dictate your trading decisions!

As far as MATIC/USD, what do you all think?  Is another correction ahead, or will a retest of this week’s support area draw in more bulls? Let me know in the comments section below!