- Polygon’s downside is protected by the descending parallel channel’s lower boundary.
- A possible buy signal by the TD Sequential indicator may bolster MATIC significantly upward.
Polygon is exchanging hands at $1.16 after testing support at $1. Last week, the token had gained ground to $0.1.7, but the massive bearish wave in the market saw the bulls tumble back to $1.
Generally, MATIC is sustaining a downtrend within a descending parallel channel. Although the upper boundary has limited the price action north, the lower border keeps bearish advances in check. For instance, the freefall on Monday stretched to $1 after the tentative support at $1.2 shattered. The channel’s lower edge reinforced this crucial anchor zone.
MATIC price recovery targets $2
The short-term technical picture is massively bullish based on the upward moving Relative Strength Index (RSI). Although not oversold, the RSI rebounds toward the midline, adding credence to the tightening bullish grip. As bulls gain more ground, investor sentiment and speculation for gains to $2 will rise.
MATIC/USD four-hour chart
Realize that Polygon is trading in the channel’s lower band. A break above the middle boundary resistance is required to validate the liftoff beyond the channel, and by extension, the confluence formed by the 50 Simple Moving Average (SMA) and the 100 SMA on the four-hour chart.
The IOMAP model by IntoTheBlock (ITB) reveals that recovery to $1.5 and $2 is possible as long as the buyer congestion at $1.14 remains unshaken. In other words, a slight push upward will take Polygon through the minor resistance levels between $1.23 and $1.26. Here, around 2,300 addresses previously bought approximately 52 million MATIC.
Polygon IOMAP chart
On the downside, the wallets at the money are in the range between $1.13 and $1.16. Here, 122 addresses previously bundled up 655.6 million MATIC. These holders are neither at a loss nor in profit. Therefore, if the support here holds, declines will be averted.
Looking at the other side of the fence
Apart from the addresses at the money, Polygon lacks immense support areas to prevent losses from extending below $1. Moreover, failing to gain the ground into the channel’s upper band may lead to a spike in overhead pressure. Note that it will be detrimental to close the day under the descending channel’s lower boundary support.