MATIC Price Prediction: Polygon Stares into the Abyss as Key Technical Pattern Spells Doom
- MATIC price forms a descending triangle pattern, hinting at 64% correction.
- The transaction history model by IntoTheBlock shows that recovery is a huge challenge.
MATIC price has been suffering under the strong arms of the bears since the all-time high of $2.7 traded in May. These losses tested area under $1 to the extent of confirming support at $0.75. Recovery attempts have been numerous, but Polygon has no made significant progress toward the record high.
At the time of writing, Polygon teeters at $1.1 while dealing with overhead pressure beneath a descending trend line. Holding above $1 has become very crucial for the resumption of the uptrend. However, the overall technical picture shows that Polygon may drop further in the near term.
MATIC price on the brink of freefall to $0.35
A descending triangle pattern has been highlighted on the 12-hour chart. This pattern is mainly considered bearish in technical analysis. However, there are instances when it may give way for bullish price action.
The descending triangle is created by drawing two trend lines, linking sequential declining peaks and relatively equal lows. It starts with a high volume but narrows the volume contacts, highlighting a consolidation period. The horizontal trend line (a-axis) shows a robust bullish front, the strong support.
However, the descending trend line (hypotenuse) shows that bears are gradually becoming more vigorous. Eventually, MATIC price is expected to break below the hypotenuse, thus, validating the pattern.
The breakout should occur before the trend lines converge and has a target equal to the distance between the triangle’s widest points. For instance, Polygon will likely dump 64% to test support at $0.35 before recovery occurs.
MATIC/USD 12-hour chart
The bearish outlook is accentuated by the In/Out of the Money Around Price (IOMAP) on-chain model, developed by IntoTheBlock. This metric shines a light on the robust resistance between $1.22 and $1.25. Here, 1,500 addresses previously bought around 622 million MATIC. Cracking this hurdle will not be a walk in the park. Therefore recovery may continue to delay.
Polygon IOMAP model highlights immense resistance
On the flip side, the IOMAP model reveals that Polygon is sitting on relatively weak support areas. An increase in selling pressure may lead to another downswing under $1 and perhaps validate the breakdown target at $0.35.
Looking at the other side of the fence
The bearish outlook will be invalidated if support at the 200 Simple Moving Average (SMA) holds. Besides, the Moving Average Convergence Divergence (MACD) has a bullish outlook, as seen on the 12-hour chart. Polygon’s uptrend will resume as the MACD closes in on the zero line and crosses into the positive region.